. - Accounting Project C (100 Points) MERCHANDISING ACOUNTING Joe Blink opened Blink Corporation. It has issued 20,000 shares of $5 par value common stock. It authorized 900,000 share. The corporation is a merchandising business. Blink applies the periodic inventory system. Also Blink provides a 2-year warranty with one of its products which was first sold in October. Blink Corporation Trial Balance September 30 Blink Corporation Trial Balance September 30 Cr. Dr. Cash $ 54,000 Inventory 14,000 Land 45,000 Plant Building 560,000 Accumulated Depreciation plant Equipment 12,000 Accumulated depreciation-equipment Common stock ($3 par) Retained earnings Totals $685,000 360,000 4,000 60,000 261,000 $685,000 Prepare journal entries to record the following merchandising transactions: Oct. 1. Issued 412,000 shares of $5 par value common stock for $36 per share. 1. Paid three months' rent on a lease rental contract, $5,800. 1 issued 12,000 shares $5 par value of common stock to attorneys in payment of bill of $60,000 for services rendered in helping the company organize. 1 Purchased office equipment on account from Office Station Co. $2,000. 1 Purchases a land today in exchange for as 100,000 zero-interest-bearing note payable four years from now. The company would record the asset at the present value of the S100,000 note establishes the exchange price of the transaction (the purchase price of the land). Assuming the present value is $ 75,816. 1. The Corp trades its used machine for a new model. The exchange has commercial substance. The original cost $12,000 less $4,000 accumulated depreciation and a fair value of $6,000. The new model lists for $16,000. The information Processing a trade-in allowance of $5,000 for the used machine. 1. Purchased merchandise form Boden Company for $6,000 under Credit terms of 1/15, n/30, FOB shipping point, Invoice dated Oct 1. 1. Sold merchandise that cost $800 to Rivera Co. for $1.500 under credit terms of 2/10, n/60 FOB shipping point, Invoice dated Oct 1. 2. Issued a 4-year, $70,000, zero interest-bearing note to Reld Company and received cash of $71,776. 2 Accepted a donation of land with a fair value of $180,000 from the Memphis Industrial Development Corp 2 3 Paid $125 cash for freight charges on the purchase of Oct 1. Accept a 60-day, 10% note to replace its existing $1,500 account receivable to Rivera Co on Octoberl. 4 5 Established a petty cash fund in the amount of $400. Issues bonds, that pay interest annually on december 31. The bonds have a $130,000 par value, the annual contract rate is 12%, and the bonds mature in 15 years. Market rate at the date of issuance is 10%. 6 Paid the premiums on property and casualty insurance policies, $3,800. 7 Purchased used truck for $8,000, paying $3,000 cash and the balance on account. Sold merchandise to Creek Co. for $900 under credit terms of 2/10, 1/60, Fob shipping point, invoice dated Oct 8. The merchandise had cost $500. 9 Issued 25,000 shares of $5 par value stock for land valued at $280,000. 9. Purchased merchandise form Light Co. for $2,200 under credit terms of 2/15, n/60, FOB destination, invoice dated Oct 9 of their 9.. Received a $200 credit memorandum form Light Co. for the return of part of the merchandise purchased on Oct 9. 9. Received the balance due from Creek Co. for the invoice dated Oct 8, net of the discount. 10. Paid cash for a newspaper advertisement, $700. II. A summary of the petty cash expenditures made by petty cash custodian is as follows: Delivery charges on merchandise purchased $60 25 Supplies purchased and used Postage expense L.O.U. from employees Miscellaneous expense 17 The petty cash fund was replenished. The balance in the fund was $12. 12. Paid Office station Co. for part of the debt incurred on October 1, $1,000. 14. Weekly payroll of $3,000 entirely subject to F.I.C.A. and Medicare (7.65%), with income tax withholding of $1,420 and union dues of $99 deducted. Journal entry to record salaries and wages paid 15. Sold merchandise that cost $800 to Art Co. For $1200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated Oct 15. 16. Issued a $200 credit memorandum to Art Co. for an allowance on goods sold on Oct 15. The merchandise had cost $120. 16 Paid Light Co. the balance due after deducting the discount. 17 Sold merchandise that cost $900 to CUSTOMERS for $1,800 cash, under FOB shipping point. Sales are subject to a 7% sales tax. 17. Paid cash for supplies, $1,950. 17 Paid cash for office equipment installation and testing $800. 18 Purchased a patent for $40,800. 18. Issued 160,000 shares of $5 par value stock for land valued at $350,000. 19 Purchased land and building for $300,000 cash. The appraised values are building, $422,500, and land, $277,500. 20 Paid cash for fill and clearing land $5,500. 21 Paid cash for insurance during office equipment transit $900. 22 Paid cash for Delinquent real estate taxes on land assumed $4,500. 24. Received the balance due from Art Co. For the invoice dated Oct 15, net of discount. 25. Sold merchandise that cost $800 to CUSTOMERS for $1,500 cash, under FOB shipping point. Sales are subject to a 7% sales tax. 26. Purchased 12% bonds, having a maturity value of $705,000, for $522,744. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2006, and mature January 1, 2011, with interest receivable December 31 of each year. Hi and Lois Company uses the effective interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. 27. Asked Client to accept a 60-day, 15% note to replace its existing $7,000 account payable to Office Station. 26.Issued a $150,000, 4-year, 12% note at face value to Forest Hills Bank and received $150,000 cash. The note requires annual interest payments each December 31. 28. Sold merchandise that cost $4,800 to Creek Co. for $7,000 under credit terms of 2/10, n/60 FOB shipping point, Invoice dated Oct 28. 27.Paid part-time receptionist for two weeks 'salary, $2,500. 27. The petty cash fund was decrease to $100. 28 A.06 per share cash dividend is declared 29.Borrows $75,000 from American Bank. The note bears interest at 9% per year. 30. Wrote off Creek Co. account as uncollectible after repeated efforts to collect from them. 30. Received $700 from Creek Co. along with a letter stating her intention to pay within 30 days. Creek Co. Reinstated Creek Co. acount in full. 30. Agrees to pay an amount for medical insurance equal to $10,000. 30. Purchased 30% of the common shares of Edwards Company for $280,000 31 Declared a 2% stock dividend, when the stock was selling for $10 per share. 31 Pay cash dividend to stockholders of record on October 28. 31 Distributed the stock dividend to stockholders from October 30. 31. Received the balance due from Creek Co. arket for 31 Purchased 4,000 of its own shares of stock in the open market for $10,000. 31 Sold 200 shares of its treasury stock for 58 per share. 31, Received from trading investment annual interest of $2.000 31 Purchase some adjacent land for expansion in lieu of paying cash for the land the company issues to Deedland Company 6.000 shares of common stock (par value $5) that have a fair value of $24 per share. 31. Weekly payroll of $3,000 entirely subject to RCA and Medicare (7.65, federal 10.8%) and state [4%) unemployment taxes. Journal entry to record Employer payroll taxes. 31.Edwards paid dividends of $68,000 31 The Corp had to sell a plant located on company property that stood directly in the path of an interstate highway. For a number of years, the state had sought to purchase the land on which the plant stood, but the company resisted. The state ultimately exercised its right of eminent domain, which the courts upheld. In settlement, Camel received $400,000. The book value of the plant (cost of $350,000 less accumulated depreciation of $200,000) and land cost $20,000. Required: 1. Journalize each transaction in a two-column journal. 2.. Post the journal to the ledger. 4. Prepare an unadjusted trial balance. 5. At the end of October, the following adjustment data were assembled. Analyze and use these data to complete the adjustments: a. Insurance expired during October is $450. b. Supplies on hand on October 31 are $600. Depreciation of office equipment for October is straight line method. The useful life is 5 years and the salvage value is $ 500. d Depreciation of equipment for October is double declining balance for October is double declining balance method. The useful life is 5 years and the salvage value is $4.000 Amortization of patent for October is Straight line method. The useful life of years 1 Merchandise ending inventory is $ 1,450 by FIFO method g. Accrued receptionist salary on October 31 is $950. h. Rent expired during October is $1,000. i. Record the October 31 accrued notes payable and bond interest. j. Record the October 31 accrued notes receivable. k. Blink Corporations is involved in a lawsuit at October 31 Blink Corp. will be liable for $90,000 as a result of this law suit. I. Edwards earned net income of $195,000. 6.Journalize and post the adjusting entries. 7. Prepare the adjusted trial balance. 8. Prepare an Income statement, a Statement of Retained Earning, Balance Sheet, compute simple earnings per share and appropriated disclousures. 9. Prepare and post the closing entries. 10. Prepare a post-closing trial balance. . - Accounting Project C (100 Points) MERCHANDISING ACOUNTING Joe Blink opened Blink Corporation. It has issued 20,000 shares of $5 par value common stock. It authorized 900,000 share. The corporation is a merchandising business. Blink applies the periodic inventory system. Also Blink provides a 2-year warranty with one of its products which was first sold in October. Blink Corporation Trial Balance September 30 Blink Corporation Trial Balance September 30 Cr. Dr. Cash $ 54,000 Inventory 14,000 Land 45,000 Plant Building 560,000 Accumulated Depreciation plant Equipment 12,000 Accumulated depreciation-equipment Common stock ($3 par) Retained earnings Totals $685,000 360,000 4,000 60,000 261,000 $685,000 Prepare journal entries to record the following merchandising transactions: Oct. 1. Issued 412,000 shares of $5 par value common stock for $36 per share. 1. Paid three months' rent on a lease rental contract, $5,800. 1 issued 12,000 shares $5 par value of common stock to attorneys in payment of bill of $60,000 for services rendered in helping the company organize. 1 Purchased office equipment on account from Office Station Co. $2,000. 1 Purchases a land today in exchange for as 100,000 zero-interest-bearing note payable four years from now. The company would record the asset at the present value of the S100,000 note establishes the exchange price of the transaction (the purchase price of the land). Assuming the present value is $ 75,816. 1. The Corp trades its used machine for a new model. The exchange has commercial substance. The original cost $12,000 less $4,000 accumulated depreciation and a fair value of $6,000. The new model lists for $16,000. The information Processing a trade-in allowance of $5,000 for the used machine. 1. Purchased merchandise form Boden Company for $6,000 under Credit terms of 1/15, n/30, FOB shipping point, Invoice dated Oct 1. 1. Sold merchandise that cost $800 to Rivera Co. for $1.500 under credit terms of 2/10, n/60 FOB shipping point, Invoice dated Oct 1. 2. Issued a 4-year, $70,000, zero interest-bearing note to Reld Company and received cash of $71,776. 2 Accepted a donation of land with a fair value of $180,000 from the Memphis Industrial Development Corp 2 3 Paid $125 cash for freight charges on the purchase of Oct 1. Accept a 60-day, 10% note to replace its existing $1,500 account receivable to Rivera Co on Octoberl. 4 5 Established a petty cash fund in the amount of $400. Issues bonds, that pay interest annually on december 31. The bonds have a $130,000 par value, the annual contract rate is 12%, and the bonds mature in 15 years. Market rate at the date of issuance is 10%. 6 Paid the premiums on property and casualty insurance policies, $3,800. 7 Purchased used truck for $8,000, paying $3,000 cash and the balance on account. Sold merchandise to Creek Co. for $900 under credit terms of 2/10, 1/60, Fob shipping point, invoice dated Oct 8. The merchandise had cost $500. 9 Issued 25,000 shares of $5 par value stock for land valued at $280,000. 9. Purchased merchandise form Light Co. for $2,200 under credit terms of 2/15, n/60, FOB destination, invoice dated Oct 9 of their 9.. Received a $200 credit memorandum form Light Co. for the return of part of the merchandise purchased on Oct 9. 9. Received the balance due from Creek Co. for the invoice dated Oct 8, net of the discount. 10. Paid cash for a newspaper advertisement, $700. II. A summary of the petty cash expenditures made by petty cash custodian is as follows: Delivery charges on merchandise purchased $60 25 Supplies purchased and used Postage expense L.O.U. from employees Miscellaneous expense 17 The petty cash fund was replenished. The balance in the fund was $12. 12. Paid Office station Co. for part of the debt incurred on October 1, $1,000. 14. Weekly payroll of $3,000 entirely subject to F.I.C.A. and Medicare (7.65%), with income tax withholding of $1,420 and union dues of $99 deducted. Journal entry to record salaries and wages paid 15. Sold merchandise that cost $800 to Art Co. For $1200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated Oct 15. 16. Issued a $200 credit memorandum to Art Co. for an allowance on goods sold on Oct 15. The merchandise had cost $120. 16 Paid Light Co. the balance due after deducting the discount. 17 Sold merchandise that cost $900 to CUSTOMERS for $1,800 cash, under FOB shipping point. Sales are subject to a 7% sales tax. 17. Paid cash for supplies, $1,950. 17 Paid cash for office equipment installation and testing $800. 18 Purchased a patent for $40,800. 18. Issued 160,000 shares of $5 par value stock for land valued at $350,000. 19 Purchased land and building for $300,000 cash. The appraised values are building, $422,500, and land, $277,500. 20 Paid cash for fill and clearing land $5,500. 21 Paid cash for insurance during office equipment transit $900. 22 Paid cash for Delinquent real estate taxes on land assumed $4,500. 24. Received the balance due from Art Co. For the invoice dated Oct 15, net of discount. 25. Sold merchandise that cost $800 to CUSTOMERS for $1,500 cash, under FOB shipping point. Sales are subject to a 7% sales tax. 26. Purchased 12% bonds, having a maturity value of $705,000, for $522,744. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2006, and mature January 1, 2011, with interest receivable December 31 of each year. Hi and Lois Company uses the effective interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category. 27. Asked Client to accept a 60-day, 15% note to replace its existing $7,000 account payable to Office Station. 26.Issued a $150,000, 4-year, 12% note at face value to Forest Hills Bank and received $150,000 cash. The note requires annual interest payments each December 31. 28. Sold merchandise that cost $4,800 to Creek Co. for $7,000 under credit terms of 2/10, n/60 FOB shipping point, Invoice dated Oct 28. 27.Paid part-time receptionist for two weeks 'salary, $2,500. 27. The petty cash fund was decrease to $100. 28 A.06 per share cash dividend is declared 29.Borrows $75,000 from American Bank. The note bears interest at 9% per year. 30. Wrote off Creek Co. account as uncollectible after repeated efforts to collect from them. 30. Received $700 from Creek Co. along with a letter stating her intention to pay within 30 days. Creek Co. Reinstated Creek Co. acount in full. 30. Agrees to pay an amount for medical insurance equal to $10,000. 30. Purchased 30% of the common shares of Edwards Company for $280,000 31 Declared a 2% stock dividend, when the stock was selling for $10 per share. 31 Pay cash dividend to stockholders of record on October 28. 31 Distributed the stock dividend to stockholders from October 30. 31. Received the balance due from Creek Co. arket for 31 Purchased 4,000 of its own shares of stock in the open market for $10,000. 31 Sold 200 shares of its treasury stock for 58 per share. 31, Received from trading investment annual interest of $2.000 31 Purchase some adjacent land for expansion in lieu of paying cash for the land the company issues to Deedland Company 6.000 shares of common stock (par value $5) that have a fair value of $24 per share. 31. Weekly payroll of $3,000 entirely subject to RCA and Medicare (7.65, federal 10.8%) and state [4%) unemployment taxes. Journal entry to record Employer payroll taxes. 31.Edwards paid dividends of $68,000 31 The Corp had to sell a plant located on company property that stood directly in the path of an interstate highway. For a number of years, the state had sought to purchase the land on which the plant stood, but the company resisted. The state ultimately exercised its right of eminent domain, which the courts upheld. In settlement, Camel received $400,000. The book value of the plant (cost of $350,000 less accumulated depreciation of $200,000) and land cost $20,000. Required: 1. Journalize each transaction in a two-column journal. 2.. Post the journal to the ledger. 4. Prepare an unadjusted trial balance. 5. At the end of October, the following adjustment data were assembled. Analyze and use these data to complete the adjustments: a. Insurance expired during October is $450. b. Supplies on hand on October 31 are $600. Depreciation of office equipment for October is straight line method. The useful life is 5 years and the salvage value is $ 500. d Depreciation of equipment for October is double declining balance for October is double declining balance method. The useful life is 5 years and the salvage value is $4.000 Amortization of patent for October is Straight line method. The useful life of years 1 Merchandise ending inventory is $ 1,450 by FIFO method g. Accrued receptionist salary on October 31 is $950. h. Rent expired during October is $1,000. i. Record the October 31 accrued notes payable and bond interest. j. Record the October 31 accrued notes receivable. k. Blink Corporations is involved in a lawsuit at October 31 Blink Corp. will be liable for $90,000 as a result of this law suit. I. Edwards earned net income of $195,000. 6.Journalize and post the adjusting entries. 7. Prepare the adjusted trial balance. 8. Prepare an Income statement, a Statement of Retained Earning, Balance Sheet, compute simple earnings per share and appropriated disclousures. 9. Prepare and post the closing entries. 10. Prepare a post-closing trial balance