Question
C11-1 Financial Reporting of Depreciation, Write-off, Bond Issuance and Common Stock Issuance, Purchase, Reissuance, and Cash Dividends (Chapters 4, 8, 9, 10, and 11) [LO
C11-1 Financial Reporting of Depreciation, Write-off, Bond Issuance and Common Stock Issuance, Purchase, Reissuance, and Cash Dividends (Chapters 4, 8, 9, 10, and 11) [LO 4-2, 4-5, 8-2, 9-3, 10-3, 11-2, 11-3]
American Laser, Inc., reported the following account balances on January 1.
Debit | Credit | |||||
Accounts Receivable | $ | 5,000 | ||||
Accumulated Depreciation | $ | 30,000 | ||||
Additional Paid-in Capital | 90,000 | |||||
Allowance for Doubtful Accounts | 2,000 | |||||
Bonds Payable | 0 | |||||
Buildings | 247,000 | |||||
Cash | 10,000 | |||||
Common Stock, 10,000 shares of $1 par | 10,000 | |||||
Notes Payable (long-term) | 10,000 | |||||
Retained Earnings | 120,000 | |||||
Treasury Stock | 0 | |||||
TOTALS | $ | 262,000 | $ | 262,000 | ||
The company entered into the following transactions during the year.
Jan. | 15 | Issued 5,000 shares of $1 par common stock for $50,000 cash. | ||
Jan. | 31 | Collected $3,000 from customers on account. | ||
Feb. | 15 | Reacquired 3,000 shares of $1 par common stock into treasury for $33,000 cash. | ||
Mar. | 15 | Reissued 2,000 shares of treasury stock for $24,000 cash. | ||
Aug. | 15 | Reissued 600 shares of treasury stock for $4,600 cash. | ||
Sept. | 15 | Declared (but did not yet pay) a $1 cash dividend on each outstanding share of common stock. | ||
Oct. | 1 | Issued 100, 10-year, $1,000 bonds, at a quoted bond price of 101. | ||
Oct. | 3 | Wrote off a $2,000 balance due from a customer who went bankrupt. | ||
Dec. | 29 | Recorded $230,000 of service revenue, all of which was collected in cash. | ||
Dec. | 30 | Paid $200,000 cash for this years wages through December 31. Ignore payroll taxes and payroll deductions. | ||
Dec. | 31 | Calculated $10,000 of depreciation for the year to be recorded. (Ignore accrual adjustments for interest and income taxes.) |
the amount of Retained earnings. At the end of the year, the adjusted net income was $20,000.
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the amount of Retained earnings. At the end of the year, the adjusted net income was $20,000.
UnadjustedAdjustedPost-closing
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