AccountDebitCredit

Cash$60,000

Accounts receivable50,000

Allowance for doubtful accounts$ 1,000

Short-Term notes receivable20,000

Inventory, January 1, 201970,000

Furniture and equipment210,000

Accumulated depreciation of F & E40,000

Patents100,000

Accounts payable22,000

Bonds payable20,000

L-T notes payable15,000

Common stock290,000

Retained earnings87,000

Dividends20,000

Prior period adjustments10,000

Sales700,000

Sales returns & allowance40,000

Sales discount10,000

Rent revenues60,000

Interest revenues10,000

Purchase420,000

Purchase returns & allowance20,000

Selling expenses60,000

Advertising expense30,000

Supplies expense6,000

Insurance expense24,000

Wage and Salary expense90,000

Rent expense60,000

Loss on sale of PS store before tax10,000

Operating income from PS store before tax25,000

Totals1,290,0001,290,000

At the year end, the following items have not been recorded.

Insurance premium expired during the year, $14,000.

Estimated bad debts expense, 1.0% of net sales.

Inventory as of 12/31/2019 turned out to be $50,000.

Office supplies were purchased for $6,000 and charged to supplies expenses then. There are $2,000 of supplies remaining as of 12/31/2019

Six months' rent of $60,000 was paid in advance on September 1, 2019 and charged to rent expense then.

Furniture and equipment have an average useful life of 5 years and salvage value of

$10,000. Coyote Company uses the straight-line method of depreciation.

Patents have been amortized by $10,000/year.

Utility bill of $2,000 for the month of December 2019 will be paid on its due date, January 10, 2020.

Salaries earned but not yet paid by December 31, 2019, $8,000.

Tax rate = 30%.

Instructions: prepare

Any necessary adjusting entries at the end of 2019.

Income Statement and statement of retained earnings, and balance sheet of the company for the year 2019 in good forms (i.e. multiple-steps statements)

Any necessary closing entries at the end of 2019.

P2. The following information pertains to business activities of the Hartman Company for the year ended on 12/31/2019

1.Stockholders invested $140,000 cash in the company on 1/1/2019

2.Purchased equipment costing $35,000 for $15,000 in cash and the remainder on credit on 1/15/2019.

3.Purchased supplies for $1,800 on 1/17/2019.

4.Paid $3,600 for a one-year insurance policy on 4/1/2019.

5. Singed a lease contract for the office building and paid $4,000 as a security deposit on 5/1/2019.

6.Hired an administrative assistant at an annual salary of $48,000 on 6/1/2019.

7.Purchased inventory costing $260,000 for $100,000 in cash and the remainder on credit on 6/2/2019

8.Paid off what Hartman owes for the purchase of inventory in transaction '7' on 6/12/2019.

9. Sold inventory costing $180,000 for $350,000 in 2019.

10. Total wage of $70,000 were paid in 2019.

11. Dividends of $4,000 were paid for 2019.

Instructions: prepare journal entries for the above business activities.

P3. PV & FV computations.

If you deposit $150,000 into a saving account yielding 12%, how big will it grow to in 5

years? Assume quarterly compounding.

What amount should be deposited in a bank account today to receive $200,000 in 6 years at 10 % interest rate? Assume semi-annually compounding.

If $4,000 is deposited into an investment account yielding 10% every 3 months starting on

1/1/2018, what amount will be available in the investment account in 4 years.

What is the present value of 10 $10,000 payments each of which will be received at the

beginning of each period over 10 periods, discounted at 6% per a compounding period.

Hawk, Inc. issued 20,000 shares of bond on 1/1/2018. Those are $1,000/ share par value, 8year, 5% stated interest rate bonds. The prevailing market rate on 1/1/2018 was 8%.

Calculate the price of the bond.

Hawk, Inc. considers the Pepsi Bottling Company and Coca Cola Bottling Company in

San Bernardino for business acquisition. Financial analysts specialized in valuation of soft drink companies estimated that Pepsi bottling will earn $400,000 a year over the next 25 years, while Coca-Cola Bottling will earn $600,000 over the next 30 years. Due to different credit rating ofthe two companies, the prevailing market interest rate of Pepsi is 10% and that of Coca-Cola is 8%. The Pepsi is asking $3,400,000, while The Coca-Cola is asking $6,000,000. Which is the better company for Hawk to take over?