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Problem Based -Short Answer -20 Marks Task: Your close friend Leslie Lazier is the owner and operator of Lazier Tech, Inc., which was organized in 2017. The company's accountant resigned suddenly in early 2018 without leaving a contact number and Leslie was left with several unanswered questions as it relates to the composition of the company's paid in capital and the total stockholders' equity. At December 31, 2017, the Lazier Tech reported the following extract from the company's balance sheet. Preferred stock, 6%, $40 par, 1,000,000 shares authorized, none issued SO Common stock, $4 par, 600,000 shares authorized, 100,000 shares issued and outstanding 400,000 Paid-in capital in excess of par common 120,000 Retained earnings During 2018, the company completed the following selected transactions: a. Issued for cash 25,000 shares of preferred stock at par value. b. Issued for cash 40,000 shares of common stock at a price of $10 per share. e. Net income for the year was $240,000, and the company declared no dividends. As her friend, Leslie now seeks your advice. REQUIRED: 1. Prepare the Stockholders Equity Section of the company's balance sheet at December 31. 2018 based on the information presented and include the following: . information on par values. (3 Marks) the number of shares authorized and issued where necessary (3 Marks) the sub total for the total paid in capital (6 Marks) total stockholders' equity (8 Marks) Tsk! You are employed to Peter Pan Eld a company owned by Peter Pantry, a merchandiser involved in the business of selling baking utensils and equipment. On January 1, 2018 you were appointed to the position of Chief Financial Officer which made you responsible for the maintenance of the company's accounting records, internal control and preparation of the financial statements. The following trial balance was extracted from the books of Peter Pan Ltd, at June 30, the end of the company's fiscal year. Peter Pan Ltd Trial Balance as at June 30, 2018 CR$ DRS 440.000 530.000 40.000 320,000 10.000 280.000 600 000 120,000 145,000 AC Name Cash Accounts Receivable Allowance for Bad Debts Merchandise Inventory Store Supplies Prepaid Rent Furniture and Equipment Accumulated Depreciation Furniture and Equipment Accounts Payable Wages Payable Notes Payable, Long-Term Uneamed Sales Revenue Peter Pantry Capital Peter Pantry Withdrawal Sales Revenue Eamed Cost of Goods Sold Wages Expense Rent Expense Utilities Expense Depreciation Expense - Furniture and Equipment Store Supplies Expense Bad debt Expense Interest Expense 510,000 260,000 1,900,000 75 000 1,095,000 845000 525 000 210.000 160.000 45,000 4,070,000 Total 4,070,000 The following additional information is available at June 30, 2018 (0) Eight (8) months' rent amounting to $280,000 was PAID IN ADVANCE on January 1, 2018 The Furniture and equipment is being depreciated over 10 years on the double- declining balance method of depreciation, down to a residue of $80,000. Wages eamed by employees NOT yet paid amounted to $35,000 at June 30, 2018. (iii) (iv) A physical count of inventory at June 30, 2018, reveals $290,000 worth of inventory on hand. (v) On January 1, 2018 the company received $260,000 IN ADVANCE for sales to be provided evenly from January 1, 2018, through October 31, 2018. None of the revenue from this client has been recorded. (vi) The aging of the Accounts Receivable schedule at June 30, 2018 indicated that the Allowance for Bad-Debts should be $65,000. Required: Prepare the necessary adjusting journal entries on June 30, 2018. /Narrations are not required) (9 marks) b) Prepare the company's multiple-step income statement for the year ended June 30, 2018. (12 marks) Prepare the company's statement of owner's equity for the year ended June 30, 2018. (3 marks) Prepare the company's classified balance sheet as at June 30, 2018. (16 marks) d) Problem Based -Short Answer -20 Marks Task: Your close friend Leslie Lazier is the owner and operator of Lazier Tech, Inc., which was organized in 2017. The company's accountant resigned suddenly in early 2018 without leaving a contact number and Leslie was left with several unanswered questions as it relates to the composition of the company's paid in capital and the total stockholders' equity. At December 31, 2017, the Lazier Tech reported the following extract from the company's balance sheet. Preferred stock, 6%, $40 par, 1,000,000 shares authorized, none issued Common stock, S4 par, 600,000 shares authorized, 100,000 shares issued and outstanding $ 400,000 Paid-in capital in excess of par-common 120,000 Retained earnings 60,000 During 2018, the company completed the following selected transactions: a. Issued for cash 25,000 shares of preferred stock at par value. b. Issued for cash 40,000 shares of common stock at a price of $10 per share. c. Net income for the year was $240,000, and the company declared no dividends. As her friend, Leslie now seeks your advice. REQUIRED: 1. Prepare the Stockholders Equity Section of the company's balance sheet at December 31, 2018 based on the information presented and include the following: information on par values. (3 Marks) the number of shares authorized and issued where necessary (3 Marks) the sub total for the total paid in capital (6 Marks) total stockholders' equity (8 Marks) Case Based - 40 Marks Task: You are employed to Peter Pan Ltd a company owned by Peter Pantry, a merchandiser involved in the business of selling baking utensils and equipment. On January 15, 2018 you were appointed to the position of Chief Financial Officer which made you responsible for the maintenance of the company's accounting records, internal control and preparation of the financial statements. The following trial balance was extracted from the books of Peter Pan Ltd, at June 30, the end of the company's fiscal year. Peter Pan Ltd Trial Balance as at June 30, 2018 CR $ DR $ 440,000 530.000 40.000 320,000 10,000 600,000 120.000 145,000 T T AIC Name Cash Accounts Receivable Allowance for Bad Debts Merchandise Inventory Store Supplies Prepaid Rent Furniture and Equipment Accumulated Depreciation - Furniture and Equipment Accounts Payable Wages Payable Notes Payable, Long-Term Unearned Sales Revenue Peter Pantry, Capital Peter Pantry, Withdrawal Sales Revenue Earned Cost of Goods Sold Wages Expense Rent Expense Utilities Expense Depreciation Expense - Furniture and Equipment Store Supplies Expense Bad debt Expense Interest Expense Total 510 000 260,000 1,900,000 75,000 1,095,000 645,000 525,000 210,000 230,000 160,000 45,000 4,070,000 4,070,000 The following additional information is available at June 30, 2018: (i) Eight (8) months' rent amounting to $280,000 was PAID IN ADVANCE on January 1, 2018 (ii) (iii) (iv) The Furniture and equipment is being depreciated over 10 years on the double- declining balance method of depreciation, down to a residue of $80,000. Wages earned by employees NOT yet paid amounted to $35.000 at June 30, 2018. A physical count of inventory at June 30, 2018, reveals $290,000 worth of inventory on hand. On January 1, 2018 the company received $260,000 IN ADVANCE for sales to be provided evenly from January 1, 2018, through October 31, 2018. None of the revenue from this client has been recorded. (vi) The aging of the Accounts Receivable schedule at June 30, 2018 indicated that the Allowance for Bad-Debts should be $65,000. Required: a) Prepare the necessary adjusting journal entries on June 30, 2018. /Narrations are not required) (9 marks) Prepare the company's multiple-step income statement for the year ended June 30, 2018 (12 marks) Prepare the company's statement of owner's equity for the year ended June 30, 2018. (3 marks) Prepare the company's classified balance sheet as at June 30, 2018. (16 marks)