Complete the following forms, I hope I can get over 90% right answers. Thank you sir!

Grindstone Paving started selling products to customers in 2017 in addition to offering paving services. In 2018, the company also started to offer landscaping services. Currently, the owner (John) owns all the shares in the corporation. To raise the needed cash, John decides to offer common and preferred stock for sale to investors starting in 2018. Below is the balance sheet at the end of 2017. Assets Cash Accounts Receivable Prepaid Insurance Inventory Property, Plant & Equipment Accumulated Depreciation Total Assets Grindstone Paving Inc. Balance Sheet As at December 31, 2017 Liabilities $121,000 Accounts Payable 25,500 Unearned Revenue 7,200 Bank Loan 5,000 Total Liabilities 55,000 Stockholders' Equity -32,000 Common Stock - 60,000 issued Retained Earnings Total Stockholders' Equity $181,700 Liabilities & Stockholders' Equit John has authorized 100,000 common shares and 25,000 preferred shares. The preferred stock will be cumulative and pay $9 dividends. John wants to keep control of his business, so he will keep his 60,000 common shares and will sit on the board of directors. 100000 25000 9 60000 John has located a few private investors that wish to purchase stock in the corporation. Some want common stock, while other are interested in preferred stock. On January 20, 2018, John issues 30,000 common shares for $75,000 cash and issues 7,000 preferred shares for $28,000 cash. 30000 75000 7000 28000 On March 1, 2018, Grindstone Paving issued and sold $200,000, 6 year bonds with an interest rate of 7%. The market rate at the time of issue was 8%. Any premium or discount on the bond is amortized using the straight line method. Interest will be paid annually on February 28. Use a 4 decimal factor for the bond calculation. 200000 6 8 0.6302 126040 4.623 64721 190761 During 2018, the company has performed well, so the board of directors decided to pay dividends. On November 30, 2018, the company declared cash dividends of $90,000, which will be paid out on December 15, 2018. Use the cash dividends method and close cash dividends at the end of the year. 90000 Prepare the journal entries for the issue of stock, issue of the bonds and the dividends. Also prepare adjustments at year end to accrue interest on the bond. Date Account Title and Explanation DR CR 1 At the end of the year, Grindstone Paving has the following list of accounts and adjusted balances. - The expansion into landscaping services did not go as planned and had to be discontinued. - All balances are normal balances. - Complete the list by filling in the missing values from the journal entries you created during the year. - The cash balance includes all transactions during the year, including the ones you prepared. - Interest expense includes interest accrued on the bond plus interest paid on the bank loan. - Interest payable will only contain interest accrued. Assume the tax rate is 30%. Assume income tax has already been paid. You will just have to calculate the income tax expense on the income statement. 30 Account Title Balance Accounts Payable $122,000 Accounts Receivable 163,765 Accumulated Depreciation 67,000 Bank Loan 50,000 Bonds Payable Cash 132,500 Common Stock Cost of Goods Sold 292,500 Depreciation Expense 35,000 2 Discount on Bonds Insurance Expense 1,200 Interest Expense 2,500 -11667 Interest Payable 11,667 Inventory 210,160 Loss from Discontinued Operations (10,200) Maintenance Expense 8,000 Preferred Stock Premium on Bonds Prepaid Insurance 14,000 Professional Fees Expense 5,400 Property, Plant & Equipment 200,000 Rent Expense 32,000 Salaries Expense 70,000 Sales Discounts 6,000 Sales Returns and Allowances 7,000 Sales Revenue 650,000 Telephone Expense 3,000 Travel Expense 15,400 Unearned Revenue 26,100 Notes: The bank loan is payable over 5 years and $10,000 will be paid by December 31, 2019. $45,000 5500 5 Prepare a multistep income statement for the year ending December 31, 2018. Round answers to the nearest whole number. Grindstone Paving Inc. Income Statement For the Year Ended December 31, 2018 3 Calculate the earnings per share for i) Income from Continuing Operations, ii) income from Discontinued Operations and iii) Net Income. Prepare a statement of retained earnings at December 31, 2018. Round answers to the nearest whole number. Grindstone Paving Inc. Statement of Retained Earnings For the Year Ended December 31, 2018 Prepare a Classified Balance Sheet at December 31, 2018. Round answers to the nearest whole number. Grindstone Paving Inc. Balance Sheet As at December 31, 2018 4 5 paving services. In n) owns all the shares ed stock for sale to $21,000 9,000 17,700 47,700 60,000 74,000 134,000 $181,700 d stock will be keep his 60,000 Some want common 0,000 common shares nterest rate of 7%. mortized using the or for the bond dividends. On id out on December ar. Also prepare 6 d balances. during the year. ve to calculate the 7 answers to the 8 om Discontinued nearest whole st whole number. 9 10 0.8203 0.8043 0.7002 0.6864 0.6598 0.6468 0.9706 0.9610 0.9515 0.9420 0.9327 0.9235 0.9143 0.9053 0.8963 0.8874 0.8787 0.8700 0.8613 0.8528 0.8444 0.8360 0.8277 0.8195 0.8114 0.8034 0.7954 0.7876 0.7798 0.7419 0.6717 0.6080 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 30 40 50 0.3715 0.4529 0.5521 0.6095 0.6217 0.6342 0.6730 0.7142 0.7284 0.7430 0.7579 0.7730 0.7885 0.8368 0.8535 0.8706 0.8880 0.9057 0.9238 0.9423 0.9612 0.9804 0.9901 0.9803 2% 1 1% 2 Period 0.2281 0.3066 0.4120 0.4776 0.4919 0.5067 0.5219 0.5375 0.5537 0.5703 0.5874 0.6050 0.6232 0.6419 0.6611 0.6810 0.7014 0.7224 0.7441 0.7664 0.7894 0.8131 0.8375 0.8626 0.8885 0.9151 0.9426 0.9709 3% 0.1407 0.2083 0.3083 0.3751 0.3901 0.4057 0.4220 0.4388 0.4564 0.4746 0.4936 0.5134 0.5339 0.5553 0.5775 0.6006 0.6246 0.6496 0.6756 0.7026 0.7307 0.7599 0.7903 0.8219 0.8548 0.8890 0.9246 0.9615 4% 0.0872 0.1420 0.2314 0.2953 0.3101 0.3256 0.3418 0.3589 0.3769 0.3957 0.4155 0.4363 0.4581 0.4810 0.5051 0.5303 0.5568 0.5847 0.6139 0.6446 0.6768 0.7107 0.7462 0.7835 0.8227 0.8638 0.9070 0.9524 5% 0.0543 0.0972 0.1741 0.2330 0.2470 0.2618 0.2775 0.2942 0.3118 0.3305 0.3503 0.3714 0.3936 0.4173 0.4423 0.4688 0.4970 0.5268 0.5584 0.5919 0.6274 0.6651 0.7050 0.7473 0.7921 0.8396 0.8900 0.9434 6% 0.0339 0.0668 0.1314 0.1842 0.1971 0.2109 0.2257 0.2415 0.2584 0.2765 0.2959 0.3166 0.3387 0.3624 0.3878 0.4150 0.4440 0.4751 0.5083 0.5439 0.5820 0.6227 0.6663 0.7130 0.7629 0.8163 0.8734 0.9346 7% 0.0213 0.0460 0.0994 0.1460 0.1577 0.1703 0.1839 0.1987 0.2145 0.2317 0.2502 0.2703 0.2919 0.3152 0.3405 0.3677 0.3971 0.4289 0.4632 0.5002 0.5403 0.5835 0.6302 0.6806 0.7350 0.7938 0.8573 0.9259 8% 0.0134 0.0318 0.0754 0.1160 0.1264 0.1378 0.1502 0.1637 0.1784 0.1945 0.2120 0.2311 0.2519 0.2745 0.2992 0.3262 0.3555 0.3875 0.4224 0.4604 0.5019 0.5470 0.5963 0.6499 0.7084 0.7722 0.8417 0.9174 9% 10% 0.0085 0.0221 0.0573 0.0923 0.1015 0.1117 0.1228 0.1351 0.1486 0.1635 0.1799 0.1978 0.2176 0.2394 0.2633 0.2897 0.3186 0.3505 0.3855 0.4241 0.4665 0.5132 0.5645 0.6209 0.6830 0.7513 0.8264 0.0054 0.0154 0.0437 0.0736 0.0817 0.0907 0.1007 0.1117 0.1240 0.1377 0.1528 0.1696 0.1883 0.2090 0.2320 0.2575 0.2858 0.3173 0.3522 0.3909 0.4339 0.4817 0.5346 0.5935 0.6587 0.7312 0.8116 0.9009 11% Interest Rate 0.9091 Appendix II: Present Value Factors for a Single Value 0.0035 0.0107 0.0334 0.0588 0.0659 0.0738 0.0826 0.0926 0.1037 0.1161 0.1300 0.1456 0.1631 0.1827 0.2046 0.2292 0.2567 0.2875 0.3220 0.3606 0.4039 0.4523 0.5066 0.5674 0.6355 0.7118 0.7972 0.8929 12% 0.0022 0.0075 0.0256 0.0471 0.0532 0.0601 0.0680 0.0768 0.0868 0.0981 0.1108 0.1252 0.1415 0.1599 0.1807 0.2042 0.2307 0.2607 0.2946 0.3329 0.3762 0.4251 0.4803 0.5428 0.6133 0.6931 0.7831 0.8850 13% 0.0014 0.0053 0.0196 0.0378 0.0431 0.0491 0.0560 0.0638 0.0728 0.0829 0.0946 0.1078 0.1229 0.1401 0.1597 0.1821 0.2076 0.2366 0.2697 0.3075 0.3506 0.3996 0.4556 0.5194 0.5921 0.6750 0.7695 0.8772 14% 0.0009 0.0037 0.0151 0.0304 0.0349 0.0402 0.0462 0.0531 0.0611 0.0703 0.0808 0.0929 0.1069 0.1229 0.1413 0.1625 0.1869 0.2149 0.2472 0.2843 0.3269 0.3759 0.4323 0.4972 0.5718 0.6575 0.7561 0.8696 15% 0.0006 0.0026 0.0116 0.0245 0.0284 0.0329 0.0382 0.0443 0.0514 0.0596 0.0691 0.0802 0.0930 0.1079 0.1252 0.1452 0.1685 0.1954 0.2267 0.2630 0.3050 0.3538 0.4104 0.4761 0.5523 0.6407 0.7432 0.8621 16% 0.0004 0.0019 0.0090 0.0197 0.0231 0.0270 0.0316 0.0370 0.0433 0.0506 0.0592 0.0693 0.0811 0.0949 0.1110 0.1299 0.1520 0.1778 0.2080 0.2434 0.2848 0.3332 0.3898 0.4561 0.5337 0.6244 0.7305 0.8547 17% 0.0003 0.0013 0.0070 0.0160 0.0188 0.0222 0.0262 0.0309 0.0365 0.0431 0.0508 0.0600 0.0708 0.0835 0.0985 0.1163 0.1372 0.1619 0.1911 0.2255 0.2660 0.3139 0.3704 0.4371 0.5158 0.6086 0.7182 0.8475 18% 0.0002 0.0010 0.0054 0.0129 0.0154 0.0183 0.0218 0.0259 0.0308 0.0367 0.0437 0.0520 0.0618 0.0736 0.0876 0.1042 0.1240 0.1476 0.1756 0.2090 0.2487 0.2959 0.3521 0.4190 0.4987 0.5934 0.7062 0.8403 19% 0.0001 0.0007 0.0042 0.0105 0.0126 0.0151 0.0181 0.0217 0.0261 0.0313 0.0376 0.0451 0.0541 0.0649 0.0779 0.0935 0.1122 0.1346 0.1615 0.1938 0.2326 0.2791 0.3349 0.4019 0.4823 0.5787 0.6944 0.8333 20% Present Value Factors for a Single Value Appendix II 465 466 1.9416 8.7455 9.2950 9.3936 9.8986 8.7605 9.3851 9.9856 9.2526 9.9540 8.9826 9.7868 7.6517 8.5660 9.4713 9 10 11 10.3676 12 11.2551 10.5753 13 12.1337 11.3484 10.6350 14 13.0037 12.1062 11.2961 10.5631 15 13.8651 12.8493 11.9379 11.1184 10.3797 5.5824 9.1216 9.0770 9.4269 9.7791 9.9148 9.7066 9.8226 24 21.2434 18.9139 16.9355 15.2470 13.7986 12.5504 11.4693 10.5288 30 25.8077 22.3965 19.6004 17.2920 15.3725 13.7648 12.4090 11.2578 10.2737 17.1591 15.0463 13.3317 11.9246 10.7574 25 22.0232 19.5235 40 32.8347 27.3555 23.1148 19.7928 50 39.1961 31.4236 25.7298 21.4822 18.2559 15.7619 13.8007 12.2335 10.9617 17.4131 15.6221 14.0939 12.7834 11.6536 10.6748 9.5802 23 20.4558 18.2922 16.4436 14.8568 13.4886 12.3034 11.2722 10.3711 8.9847 8.8832 8.7715 9.4424 8.5136 8.6487 22 19.6604 17.6580 15.9369 14.4511 13.1630 12.0416 11.0612 10.2007 9.1285 8.3649 8.2014 8.0216 7.8237 7.6061 7.3667 7.1034 6.8137 6.4951 6.1446 5.7590 5.3349 4.8684 4.3553 3.7908 3.1699 2.4869 1.7355 0.9091 10% 9.0417 8.9511 8.6938 8.4217 8.3481 8.2664 8.1757 8.0751 7.9633 7.8393 7.7016 7.5488 7.3792 7.1909 6.9819 6.7499 6.4924 6.2065 5.8892 5.5370 5.1461 4.7122 4.2305 3.6959 3.1024 2.4437 1.7125 0.9009 11% Interest Rate 9.2922 9.8181 20 18.0456 16.3514 14.8775 13.5903 12.4622 11.4699 10.5940 8.9501 8.7556 8.5436 8.3126 8.0607 7.7862 7.4869 7.1607 6.8052 6.4177 5.9952 5.5348 5.0330 4.4859 3.8897 3.2397 2.5313 1.7591 0.9174 9% 17.0112 15.4150 14.0292 12.8212 11.7641 10.8355 10.0168 19 17.2260 15.6785 14.3238 13.1339 12.0853 11.1581 10.3356 21 18.8570 9.3719 9.6036 18 16.3983 14.9920 13.7535 12.6593 11.6896 10.8276 10.0591 8.8514 8.5595 8.2442 7.9038 7.5361 7.1390 6.7101 6.2469 5.7466 5.2064 9.7632 8.3577 7.9427 7.4987 7.0236 6.5152 5.9713 5.3893 17 15.5623 14.2919 13.1661 12.1657 11.2741 10.4773 8.8527 8.3838 7.8869 7.3601 6.8017 6.2098 9.1079 8.8633 8.3064 7.7217 7.1078 6.4632 5.7864 4.6229 9.4466 8.1109 7.4353 6.7327 6.0021 4.7665 9.7122 8.5302 7.7861 7.0197 6.2303 4.9173 3.9927 3.3121 2.5771 1.7833 0.9259 8% 16 14.7179 13.5777 12.5611 11.6523 10.8378 10.1059 8.1622 7.3255 6.4720 5.0757 4.1002 3.3872 6.7282 5.2421 4.2124 3.4651 2.6243 1.8080 8 5.4172 4.3295 3.5460 1.8334 2.6730 7 5.6014 4.4518 3.6299 1.8594 2.7232 0.9346 7% 5.7955 4.5797 3.7171 2.7751 1.8861 0.9434 6% 6 4.7135 3.8077 1.9135 2.8286 0.9524 5% 3.9020 2.8839 0.9615 4% 4.8534 2.9410 0.9709 3% 5 1.9704 2 3 0.9804 2% 4 0.9901 1% 1 Period Appendix III: Present Value Factors for an Annuity 8.3045 8.2438 8.0552 7.8431 7.7843 7.7184 7.6446 7.5620 7.4694 7.3658 7.2497 7.1196 6.9740 6.8109 6.6282 6.4235 6.1944 5.9377 5.6502 5.3282 4.9676 4.5638 4.1114 3.6048 3.0373 2.4018 1.6901 0.8929 12% 7.6752 7.6344 7.4957 7.3300 7.2829 7.2297 7.1695 7.1016 7.0248 6.9380 6.8399 6.7291 6.6039 6.4624 6.3025 6.1218 5.9176 5.6869 5.4262 5.1317 4.7988 4.4226 3.9975 3.5172 2.9745 2.3612 1.6681 0.8850 13% 7.1327 7.1050 7.0027 6.8729 6.8351 6.7921 6.7429 6.6870 6.6231 6.5504 6.4674 6.3729 6.2651 6.1422 6.0021 5.8424 5.6603 5.4527 5.2161 4.9464 4.6389 4.2883 3.8887 3.4331 2.9137 2.3216 1.6467 0.8772 14% 6.6605 6.6418 6.5660 6.4641 6.4338 6.3988 6.3587 6.3125 6.2593 6.1982 6.1280 6.0472 5.9542 5.8474 5.7245 5.5831 5.4206 5.2337 5.0188 4.7716 4.4873 4.1604 3.7845 3.3522 2.8550 2.2832 1.6257 0.8696 15% 6.2463 6.2335 6.1772 6.0971 6.0726 6.0442 6.0113 5.9731 5.9288 5.8775 5.8178 5.7487 5.6685 5.5755 5.4675 5.3423 5.1971 5.0286 4.8332 4.6065 4.3436 4.0386 3.6847 3.2743 2.7982 2.2459 1.6052 0.8621 16% 5.8801 5.8713 5.8294 5.7662 5.7465 5.7234 5.6964 5.6648 5.6278 5.5845 5.5339 5.4746 5.4053 5.3242 5.2293 5.1183 4.9884 4.8364 4.6586 4.4506 4.2072 3.9224 3.5892 3.1993 2.7432 2.2096 1.5852 0.8547 17% 5.5541 5.5482 5.5168 5.4669 5.4509 5.4321 5.4099 5.3837 5.3527 5.3162 5.2732 5.2223 5.1624 5.0916 5.0081 4.9095 4.7932 4.6560 4.4941 4.3030 4.0776 3.8115 3.4976 3.1272 2.6901 2.1743 1.5656 0.8475 18% 5.2623 5.2582 5.2347 5.1951 5.1822 5.1668 5.1486 5.1268 5.1009 5.0700 5.0333 4.9897 4.9377 4.8759 4.8023 4.7147 4.6105 4.4865 4.3389 4.1633 3.9544 3.7057 3.4098 3.0576 2.6386 2.1399 1.5465 0.8403 19% 4.9995 4.9966 4.9789 4.9476 4.9371 4.9245 4.9094 4.8913 4.8696 4.8435 4.8122 4.7746 4.7296 4.6755 4.6106 4.5327 4.4392 4.3271 4.1925 4.0310 3.8372 3.6046 3.3255 2.9906 2.5887 2.1065 1.5278 0.8333 20% Appendix III Present Value Factors for an Annuity Grindstone Paving started selling products to customers in 2017 in addition to offering paving services. In 2018, the company also started to offer landscaping services. Currently, the owner (John) owns all the shares in the corporation. To raise the needed cash, John decides to offer common and preferred stock for sale to investors starting in 2018. Below is the balance sheet at the end of 2017. Assets Cash Accounts Receivable Prepaid Insurance Inventory Property, Plant & Equipment Accumulated Depreciation Total Assets Grindstone Paving Inc. Balance Sheet As at December 31, 2017 Liabilities $121,000 Accounts Payable 25,500 Unearned Revenue 7,200 Bank Loan 5,000 Total Liabilities 55,000 Stockholders' Equity -32,000 Common Stock - 60,000 issued Retained Earnings Total Stockholders' Equity $181,700 Liabilities & Stockholders' Equity $21,000 9,000 17,700 47,700 60,000 74,000 134,000 $181,700 John has authorized 100,000 common shares and 25,000 preferred shares. The preferred stock will be cumulative and pay $9 dividends. John wants to keep control of his business, so he will keep his 60,000 common shares and will sit on the board of directors. 100000 25000 9 60000 John has located a few private investors that wish to purchase stock in the corporation. Some want common stock, while other are interested in preferred stock. On January 20, 2018, John issues 30,000 common shares for $75,000 cash and issues 7,000 preferred shares for $28,000 cash. 30000 75000 7000 28000 On March 1, 2018, Grindstone Paving issued and sold $200,000, 6 year bonds with an interest rate of 7%. The market rate at the time of issue was 8%. Any premium or discount on the bond is amortized using the straight line method. Interest will be paid annually on February 28. Use a 4 decimal factor for the bond calculation. 200000 6 8 0.6302 126040 4.623 64721 190761 During 2018, the company has performed well, so the board of directors decided to pay dividends. On November 30, 2018, the company declared cash dividends of $90,000, which will be paid out on December 15, 2018. Use the cash dividends method and close cash dividends at the end of the year. 90000 Prepare the journal entries for the issue of stock, issue of the bonds and the dividends. Also prepare adjustments at year end to accrue interest on the bond. Date 20/01/2018 Cash Account Title and Explanation Common Stock DR 30,000 CR 30,000 1 Issue of Common Stock 20/01/2018 Cash 28,000 Preferred Stock 28,000 Issue of Preferred Stock 1-Mar Cash Bonds Payable Premium on bonds 200,000 180000 20,000 Sale of bonds Interest Expense Premium on bonds Cash 5,000 15,000 20,000 Amortization of premium on bonds At the end of the year, Grindstone Paving has the following list of accounts and adjusted balances. - The expansion into landscaping services did not go as planned and had to be discontinued. - All balances are normal balances. - Complete the list by filling in the missing values from the journal entries you created during the year. - The cash balance includes all transactions during the year, including the ones you prepared. - Interest expense includes interest accrued on the bond plus interest paid on the bank loan. - Interest payable will only contain interest accrued. Assume the tax rate is 30%. Assume income tax has already been paid. You will just have to calculate the income tax expense on the income statement. 30 Account Title Balance 2 Accounts Payable $122,000 Accounts Receivable 163,765 Accumulated Depreciation 67,000 Bank Loan 50,000 Bonds Payable 180,000 Cash 132,500 Common Stock 90,000 Cost of Goods Sold 292,500 Depreciation Expense 35,000 Discount on Bonds 20,000 Insurance Expense 1,200 1667 Interest Expense 15,834 11,667 Interest Payable 14,000 Inventory 210,160 Loss from Discontinued Operations (10,200) Maintenance Expense 8,000 Preferred Stock 28,000 Premium on Bonds 20,000 Prepaid Insurance 14,000 Professional Fees Expense 5,400 Property, Plant & Equipment 200,000 Rent Expense 32,000 Salaries Expense 70,000 Sales Discounts 6,000 Sales Returns and Allowances 7,000 Sales Revenue 650,000 Telephone Expense 3,000 Travel Expense 15,400 Unearned Revenue 26,100 Notes: The bank loan is payable over 5 years and $10,000 will be paid by December 31, 2019. $45,000 5500 5 Prepare a multistep income statement for the year ending December 31, 2018. Round answers to the nearest whole number. Grindstone Paving Inc. Income Statement For the Year Ended December 31, 2018 Sales Revenues COGS Less returns and allowances Less Discounts Gross Profit 650,000 0 7000 6000 637,000 3 EXPENSES Rent Interest Depreciation Wages Insurance Maintenance Telephone Travel Total Expenses $32,000 2,500 35,000 70,000 1,200 8,000 3,000 15,400 167,100 Net Profit 469,900 Prepare a statement of retained earnings at December 31, 2018. Round answers to the nearest whole number. Grindstone Paving Inc. Statement of Retained Earnings For the Year Ended December 31, 2018 Beginning Balance Retained Earnings $74,000 Net Income $469,900 Dividends Paid $372,575 Ending balance $171,325 Prepare a Classified Balance Sheet at December 31, 2018. Round answers to the nearest whole number. Grindstone Paving Inc. Balance Sheet As at December 31, 2018 ASSETS CURRENT ASSETS 4 Cash Accounts Receivables Inventory Prepaid Insurance Total Current Assets LONG TERM ASSETS Property, plant and equipment Less Depreciation accumulated Total Long Term Assets TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Accounts Payable Interest Payable Unearned revenue Total Current Liabilities LONG TERM LIABILITIES Bank Loan Bonds Payable Total Long Term Liability TOTAL LIABILITIES SHAREHOLDER'S EQUITY Common Stock Retained Earnings Other Income TOTAL LIABILITIES AND EQUITY t $132,500 163,765 210,160 14,000 $520,425 200,000 67,000 $133,000 653,425 122,000 14,000 26,100 $162,100 50,000 180,000 230,000 392,100 90000 171325 0 653,425 5 0.8203 0.8043 0.7002 0.6864 0.6598 0.6468 0.9706 0.9610 0.9515 0.9420 0.9327 0.9235 0.9143 0.9053 0.8963 0.8874 0.8787 0.8700 0.8613 0.8528 0.8444 0.8360 0.8277 0.8195 0.8114 0.8034 0.7954 0.7876 0.7798 0.7419 0.6717 0.6080 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 30 40 50 0.3715 0.4529 0.5521 0.6095 0.6217 0.6342 0.6730 0.7142 0.7284 0.7430 0.7579 0.7730 0.7885 0.8368 0.8535 0.8706 0.8880 0.9057 0.9238 0.9423 0.9612 0.9804 0.9901 0.9803 2% 1 1% 2 Period 0.2281 0.3066 0.4120 0.4776 0.4919 0.5067 0.5219 0.5375 0.5537 0.5703 0.5874 0.6050 0.6232 0.6419 0.6611 0.6810 0.7014 0.7224 0.7441 0.7664 0.7894 0.8131 0.8375 0.8626 0.8885 0.9151 0.9426 0.9709 3% 0.1407 0.2083 0.3083 0.3751 0.3901 0.4057 0.4220 0.4388 0.4564 0.4746 0.4936 0.5134 0.5339 0.5553 0.5775 0.6006 0.6246 0.6496 0.6756 0.7026 0.7307 0.7599 0.7903 0.8219 0.8548 0.8890 0.9246 0.9615 4% 0.0872 0.1420 0.2314 0.2953 0.3101 0.3256 0.3418 0.3589 0.3769 0.3957 0.4155 0.4363 0.4581 0.4810 0.5051 0.5303 0.5568 0.5847 0.6139 0.6446 0.6768 0.7107 0.7462 0.7835 0.8227 0.8638 0.9070 0.9524 5% 0.0543 0.0972 0.1741 0.2330 0.2470 0.2618 0.2775 0.2942 0.3118 0.3305 0.3503 0.3714 0.3936 0.4173 0.4423 0.4688 0.4970 0.5268 0.5584 0.5919 0.6274 0.6651 0.7050 0.7473 0.7921 0.8396 0.8900 0.9434 6% 0.0339 0.0668 0.1314 0.1842 0.1971 0.2109 0.2257 0.2415 0.2584 0.2765 0.2959 0.3166 0.3387 0.3624 0.3878 0.4150 0.4440 0.4751 0.5083 0.5439 0.5820 0.6227 0.6663 0.7130 0.7629 0.8163 0.8734 0.9346 7% 0.0213 0.0460 0.0994 0.1460 0.1577 0.1703 0.1839 0.1987 0.2145 0.2317 0.2502 0.2703 0.2919 0.3152 0.3405 0.3677 0.3971 0.4289 0.4632 0.5002 0.5403 0.5835 0.6302 0.6806 0.7350 0.7938 0.8573 0.9259 8% 0.0134 0.0318 0.0754 0.1160 0.1264 0.1378 0.1502 0.1637 0.1784 0.1945 0.2120 0.2311 0.2519 0.2745 0.2992 0.3262 0.3555 0.3875 0.4224 0.4604 0.5019 0.5470 0.5963 0.6499 0.7084 0.7722 0.8417 0.9174 9% 10% 0.0085 0.0221 0.0573 0.0923 0.1015 0.1117 0.1228 0.1351 0.1486 0.1635 0.1799 0.1978 0.2176 0.2394 0.2633 0.2897 0.3186 0.3505 0.3855 0.4241 0.4665 0.5132 0.5645 0.6209 0.6830 0.7513 0.8264 0.0054 0.0154 0.0437 0.0736 0.0817 0.0907 0.1007 0.1117 0.1240 0.1377 0.1528 0.1696 0.1883 0.2090 0.2320 0.2575 0.2858 0.3173 0.3522 0.3909 0.4339 0.4817 0.5346 0.5935 0.6587 0.7312 0.8116 0.9009 11% Interest Rate 0.9091 Appendix II: Present Value Factors for a Single Value 0.0035 0.0107 0.0334 0.0588 0.0659 0.0738 0.0826 0.0926 0.1037 0.1161 0.1300 0.1456 0.1631 0.1827 0.2046 0.2292 0.2567 0.2875 0.3220 0.3606 0.4039 0.4523 0.5066 0.5674 0.6355 0.7118 0.7972 0.8929 12% 0.0022 0.0075 0.0256 0.0471 0.0532 0.0601 0.0680 0.0768 0.0868 0.0981 0.1108 0.1252 0.1415 0.1599 0.1807 0.2042 0.2307 0.2607 0.2946 0.3329 0.3762 0.4251 0.4803 0.5428 0.6133 0.6931 0.7831 0.8850 13% 0.0014 0.0053 0.0196 0.0378 0.0431 0.0491 0.0560 0.0638 0.0728 0.0829 0.0946 0.1078 0.1229 0.1401 0.1597 0.1821 0.2076 0.2366 0.2697 0.3075 0.3506 0.3996 0.4556 0.5194 0.5921 0.6750 0.7695 0.8772 14% 0.0009 0.0037 0.0151 0.0304 0.0349 0.0402 0.0462 0.0531 0.0611 0.0703 0.0808 0.0929 0.1069 0.1229 0.1413 0.1625 0.1869 0.2149 0.2472 0.2843 0.3269 0.3759 0.4323 0.4972 0.5718 0.6575 0.7561 0.8696 15% 0.0006 0.0026 0.0116 0.0245 0.0284 0.0329 0.0382 0.0443 0.0514 0.0596 0.0691 0.0802 0.0930 0.1079 0.1252 0.1452 0.1685 0.1954 0.2267 0.2630 0.3050 0.3538 0.4104 0.4761 0.5523 0.6407 0.7432 0.8621 16% 0.0004 0.0019 0.0090 0.0197 0.0231 0.0270 0.0316 0.0370 0.0433 0.0506 0.0592 0.0693 0.0811 0.0949 0.1110 0.1299 0.1520 0.1778 0.2080 0.2434 0.2848 0.3332 0.3898 0.4561 0.5337 0.6244 0.7305 0.8547 17% 0.0003 0.0013 0.0070 0.0160 0.0188 0.0222 0.0262 0.0309 0.0365 0.0431 0.0508 0.0600 0.0708 0.0835 0.0985 0.1163 0.1372 0.1619 0.1911 0.2255 0.2660 0.3139 0.3704 0.4371 0.5158 0.6086 0.7182 0.8475 18% 0.0002 0.0010 0.0054 0.0129 0.0154 0.0183 0.0218 0.0259 0.0308 0.0367 0.0437 0.0520 0.0618 0.0736 0.0876 0.1042 0.1240 0.1476 0.1756 0.2090 0.2487 0.2959 0.3521 0.4190 0.4987 0.5934 0.7062 0.8403 19% 0.0001 0.0007 0.0042 0.0105 0.0126 0.0151 0.0181 0.0217 0.0261 0.0313 0.0376 0.0451 0.0541 0.0649 0.0779 0.0935 0.1122 0.1346 0.1615 0.1938 0.2326 0.2791 0.3349 0.4019 0.4823 0.5787 0.6944 0.8333 20% Present Value Factors for a Single Value Appendix II 465 466 1.9416 8.7455 9.2950 9.3936 9.8986 8.7605 9.3851 9.9856 9.2526 9.9540 8.9826 9.7868 7.6517 8.5660 9.4713 9 10 11 10.3676 12 11.2551 10.5753 13 12.1337 11.3484 10.6350 14 13.0037 12.1062 11.2961 10.5631 15 13.8651 12.8493 11.9379 11.1184 10.3797 5.5824 9.1216 9.0770 9.4269 9.7791 9.9148 9.7066 9.8226 24 21.2434 18.9139 16.9355 15.2470 13.7986 12.5504 11.4693 10.5288 30 25.8077 22.3965 19.6004 17.2920 15.3725 13.7648 12.4090 11.2578 10.2737 17.1591 15.0463 13.3317 11.9246 10.7574 25 22.0232 19.5235 40 32.8347 27.3555 23.1148 19.7928 50 39.1961 31.4236 25.7298 21.4822 18.2559 15.7619 13.8007 12.2335 10.9617 17.4131 15.6221 14.0939 12.7834 11.6536 10.6748 9.5802 23 20.4558 18.2922 16.4436 14.8568 13.4886 12.3034 11.2722 10.3711 8.9847 8.8832 8.7715 9.4424 8.5136 8.6487 22 19.6604 17.6580 15.9369 14.4511 13.1630 12.0416 11.0612 10.2007 9.1285 8.3649 8.2014 8.0216 7.8237 7.6061 7.3667 7.1034 6.8137 6.4951 6.1446 5.7590 5.3349 4.8684 4.3553 3.7908 3.1699 2.4869 1.7355 0.9091 10% 9.0417 8.9511 8.6938 8.4217 8.3481 8.2664 8.1757 8.0751 7.9633 7.8393 7.7016 7.5488 7.3792 7.1909 6.9819 6.7499 6.4924 6.2065 5.8892 5.5370 5.1461 4.7122 4.2305 3.6959 3.1024 2.4437 1.7125 0.9009 11% Interest Rate 9.2922 9.8181 20 18.0456 16.3514 14.8775 13.5903 12.4622 11.4699 10.5940 8.9501 8.7556 8.5436 8.3126 8.0607 7.7862 7.4869 7.1607 6.8052 6.4177 5.9952 5.5348 5.0330 4.4859 3.8897 3.2397 2.5313 1.7591 0.9174 9% 17.0112 15.4150 14.0292 12.8212 11.7641 10.8355 10.0168 19 17.2260 15.6785 14.3238 13.1339 12.0853 11.1581 10.3356 21 18.8570 9.3719 9.6036 18 16.3983 14.9920 13.7535 12.6593 11.6896 10.8276 10.0591 8.8514 8.5595 8.2442 7.9038 7.5361 7.1390 6.7101 6.2469 5.7466 5.2064 9.7632 8.3577 7.9427 7.4987 7.0236 6.5152 5.9713 5.3893 17 15.5623 14.2919 13.1661 12.1657 11.2741 10.4773 8.8527 8.3838 7.8869 7.3601 6.8017 6.2098 9.1079 8.8633 8.3064 7.7217 7.1078 6.4632 5.7864 4.6229 9.4466 8.1109 7.4353 6.7327 6.0021 4.7665 9.7122 8.5302 7.7861 7.0197 6.2303 4.9173 3.9927 3.3121 2.5771 1.7833 0.9259 8% 16 14.7179 13.5777 12.5611 11.6523 10.8378 10.1059 8.1622 7.3255 6.4720 5.0757 4.1002 3.3872 6.7282 5.2421 4.2124 3.4651 2.6243 1.8080 8 5.4172 4.3295 3.5460 1.8334 2.6730 7 5.6014 4.4518 3.6299 1.8594 2.7232 0.9346 7% 5.7955 4.5797 3.7171 2.7751 1.8861 0.9434 6% 6 4.7135 3.8077 1.9135 2.8286 0.9524 5% 3.9020 2.8839 0.9615 4% 4.8534 2.9410 0.9709 3% 5 1.9704 2 3 0.9804 2% 4 0.9901 1% 1 Period Appendix III: Present Value Factors for an Annuity 8.3045 8.2438 8.0552 7.8431 7.7843 7.7184 7.6446 7.5620 7.4694 7.3658 7.2497 7.1196 6.9740 6.8109 6.6282 6.4235 6.1944 5.9377 5.6502 5.3282 4.9676 4.5638 4.1114 3.6048 3.0373 2.4018 1.6901 0.8929 12% 7.6752 7.6344 7.4957 7.3300 7.2829 7.2297 7.1695 7.1016 7.0248 6.9380 6.8399 6.7291 6.6039 6.4624 6.3025 6.1218 5.9176 5.6869 5.4262 5.1317 4.7988 4.4226 3.9975 3.5172 2.9745 2.3612 1.6681 0.8850 13% 7.1327 7.1050 7.0027 6.8729 6.8351 6.7921 6.7429 6.6870 6.6231 6.5504 6.4674 6.3729 6.2651 6.1422 6.0021 5.8424 5.6603 5.4527 5.2161 4.9464 4.6389 4.2883 3.8887 3.4331 2.9137 2.3216 1.6467 0.8772 14% 6.6605 6.6418 6.5660 6.4641 6.4338 6.3988 6.3587 6.3125 6.2593 6.1982 6.1280 6.0472 5.9542 5.8474 5.7245 5.5831 5.4206 5.2337 5.0188 4.7716 4.4873 4.1604 3.7845 3.3522 2.8550 2.2832 1.6257 0.8696 15% 6.2463 6.2335 6.1772 6.0971 6.0726 6.0442 6.0113 5.9731 5.9288 5.8775 5.8178 5.7487 5.6685 5.5755 5.4675 5.3423 5.1971 5.0286 4.8332 4.6065 4.3436 4.0386 3.6847 3.2743 2.7982 2.2459 1.6052 0.8621 16% 5.8801 5.8713 5.8294 5.7662 5.7465 5.7234 5.6964 5.6648 5.6278 5.5845 5.5339 5.4746 5.4053 5.3242 5.2293 5.1183 4.9884 4.8364 4.6586 4.4506 4.2072 3.9224 3.5892 3.1993 2.7432 2.2096 1.5852 0.8547 17% 5.5541 5.5482 5.5168 5.4669 5.4509 5.4321 5.4099 5.3837 5.3527 5.3162 5.2732 5.2223 5.1624 5.0916 5.0081 4.9095 4.7932 4.6560 4.4941 4.3030 4.0776 3.8115 3.4976 3.1272 2.6901 2.1743 1.5656 0.8475 18% 5.2623 5.2582 5.2347 5.1951 5.1822 5.1668 5.1486 5.1268 5.1009 5.0700 5.0333 4.9897 4.9377 4.8759 4.8023 4.7147 4.6105 4.4865 4.3389 4.1633 3.9544 3.7057 3.4098 3.0576 2.6386 2.1399 1.5465 0.8403 19% 4.9995 4.9966 4.9789 4.9476 4.9371 4.9245 4.9094 4.8913 4.8696 4.8435 4.8122 4.7746 4.7296 4.6755 4.6106 4.5327 4.4392 4.3271 4.1925 4.0310 3.8372 3.6046 3.3255 2.9906 2.5887 2.1065 1.5278 0.8333 20% Appendix III Present Value Factors for an Annuity Grindstone Paving started selling products to customers in 2017 in addition to offering paving services. In 2018, the company also started to offer landscaping services. Currently, the owner (John) owns all the shares in the corporation. To raise the needed cash, John decides to offer common and preferred stock for sale to investors starting in 2018. Below is the balance sheet at the end of 2017. Assets Cash Accounts Receivable Prepaid Insurance Inventory Property, Plant & Equipment Accumulated Depreciation Total Assets Grindstone Paving Inc. Balance Sheet As at December 31, 2017 Liabilities $121,000 Accounts Payable 25,500 Unearned Revenue 7,200 Bank Loan 5,000 Total Liabilities 55,000 Stockholders' Equity -32,000 Common Stock - 60,000 issued Retained Earnings Total Stockholders' Equity $181,700 Liabilities & Stockholders' Equity $21,000 9,000 17,700 47,700 60,000 74,000 134,000 $181,700 John has authorized 100,000 common shares and 25,000 preferred shares. The preferred stock will be cumulative and pay $9 dividends. John wants to keep control of his business, so he will keep his 60,000 common shares and will sit on the board of directors. 100000 25000 9 60000 John has located a few private investors that wish to purchase stock in the corporation. Some want common stock, while other are interested in preferred stock. On January 20, 2018, John issues 30,000 common shares for $75,000 cash and issues 7,000 preferred shares for $28,000 cash. 30000 75000 7000 28000 On March 1, 2018, Grindstone Paving issued and sold $200,000, 6 year bonds with an interest rate of 7%. The market rate at the time of issue was 8%. Any premium or discount on the bond is amortized using the straight line method. Interest will be paid annually on February 28. Use a 4 decimal factor for the bond calculation. 200000 6 8 0.6302 126040 4.623 64721 190761 During 2018, the company has performed well, so the board of directors decided to pay dividends. On November 30, 2018, the company declared cash dividends of $90,000, which will be paid out on December 15, 2018. Use the cash dividends method and close cash dividends at the end of the year. 90000 Prepare the journal entries for the issue of stock, issue of the bonds and the dividends. Also prepare adjustments at year end to accrue interest on the bond. Date 20/01/2018 Cash Account Title and Explanation Common Stock DR 30,000 CR 30,000 1 Issue of Common Stock 20/01/2018 Cash 28,000 Preferred Stock 28,000 Issue of Preferred Stock 1-Mar Cash Bonds Payable Premium on bonds 200,000 180000 20,000 Sale of bonds Interest Expense Premium on bonds Cash 5,000 15,000 20,000 Amortization of premium on bonds At the end of the year, Grindstone Paving has the following list of accounts and adjusted balances. - The expansion into landscaping services did not go as planned and had to be discontinued. - All balances are normal balances. - Complete the list by filling in the missing values from the journal entries you created during the year. - The cash balance includes all transactions during the year, including the ones you prepared. - Interest expense includes interest accrued on the bond plus interest paid on the bank loan. - Interest payable will only contain interest accrued. Assume the tax rate is 30%. Assume income tax has already been paid. You will just have to calculate the income tax expense on the income statement. 30 Account Title Balance 2 Accounts Payable $122,000 Accounts Receivable 163,765 Accumulated Depreciation 67,000 Bank Loan 50,000 Bonds Payable 180,000 Cash 132,500 Common Stock 90,000 Cost of Goods Sold 292,500 Depreciation Expense 35,000 Discount on Bonds 20,000 Insurance Expense 1,200 1667 Interest Expense 15,834 11,667 Interest Payable 14,000 Inventory 210,160 Loss from Discontinued Operations (10,200) Maintenance Expense 8,000 Preferred Stock 28,000 Premium on Bonds 20,000 Prepaid Insurance 14,000 Professional Fees Expense 5,400 Property, Plant & Equipment 200,000 Rent Expense 32,000 Salaries Expense 70,000 Sales Discounts 6,000 Sales Returns and Allowances 7,000 Sales Revenue 650,000 Telephone Expense 3,000 Travel Expense 15,400 Unearned Revenue 26,100 Notes: The bank loan is payable over 5 years and $10,000 will be paid by December 31, 2019. $45,000 5500 5 Prepare a multistep income statement for the year ending December 31, 2018. Round answers to the nearest whole number. Grindstone Paving Inc. Income Statement For the Year Ended December 31, 2018 Sales Revenues COGS Less returns and allowances Less Discounts Gross Profit 650,000 0 7000 6000 637,000 3 EXPENSES Rent Interest Depreciation Wages Insurance Maintenance Telephone Travel Total Expenses $32,000 2,500 35,000 70,000 1,200 8,000 3,000 15,400 167,100 Net Profit 469,900 Prepare a statement of retained earnings at December 31, 2018. Round answers to the nearest whole number. Grindstone Paving Inc. Statement of Retained Earnings For the Year Ended December 31, 2018 Beginning Balance Retained Earnings $74,000 Net Income $469,900 Dividends Paid $372,575 Ending balance $171,325 Prepare a Classified Balance Sheet at December 31, 2018. Round answers to the nearest whole number. Grindstone Paving Inc. Balance Sheet As at December 31, 2018 ASSETS CURRENT ASSETS 4 Cash Accounts Receivables Inventory Prepaid Insurance Total Current Assets LONG TERM ASSETS Property, plant and equipment Less Depreciation accumulated Total Long Term Assets TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Accounts Payable Interest Payable Unearned revenue Total Current Liabilities LONG TERM LIABILITIES Bank Loan Bonds Payable Total Long Term Liability TOTAL LIABILITIES SHAREHOLDER'S EQUITY Common Stock Retained Earnings Other Income TOTAL LIABILITIES AND EQUITY t $132,500 163,765 210,160 14,000 $520,425 200,000 67,000 $133,000 653,425 122,000 14,000 26,100 $162,100 50,000 180,000 230,000 392,100 90000 171325 0 653,425 5