Delphinium Corp. Trial Balance at December $31,20$XX is presented below.

All $20$XX transactions have been recorded except for the items described on the next page.

Debit Credit

Cash $ $126,934$

Accounts Receivable $225,500$

Inventory $95,125$

Debt Investments $0$

Land $650,000$

Buildings $500,650$

Equipment $275,000$

Allowance for Doubtful Accounts $ $10,315$

Accumulated Depreciation$-$Buildings $52,275$

Accumulated Depreciation$-$Equipment $52,550$

Accounts Payable $35,278$

Interest Payable $0$

Unearned Rent Revenue $40,500$

Dividends Payable $0$

Income Tax Payable $0$

Bonds Payable $0$

Discount on Bonds Payable $0$

Common Stock $($$$1$ par$)110,000$

Paid in Capital in Excess of Par$-$Common Stock $110,000$

Preferred Stock $($$$5$ par$)0$

Paid in Capital in Excess of Par$-$Preferred Stock $0$

Retained Earnings $1,235,944$

Treasury Stock $0$

Cash Dividends $0$

Sales Revenue $1,116,708$

Rent Revenue $0$

Gain on sale of land $0$

Loss on sale of debt investments $0$

Bad Debt Expense $0$

Interest Expense $0$

Cost of Goods Sold $303,912$

Depreciation Expense $.0$

Other Operating Expenses $335,000$

Salaries and Wages Expense $251,449$

Income Tax Expense $0$

Total $ $2,763,570$ $ $2,763,570$

Unrecorded transactions:

Round all calculations if necessary to $-0-$ decimals $($to the nearest dollar, do not show cents$).$

$1.$ On January $1,20$XX$,$ Delphinium Corp. issued $15,500$ shares of $$5$ par, $6\%$ preferred stock for $$185,000.$

$2.$ On January $1,20$XX$,$ Delphinium Corp. also issued $55,000$ shares of common stock for $$158,500.$

$3.$ On January $1,20$XX$,$ Delphinium Corp. issued $$900,000,6\%,12-$year bond when the market rate was $9\%.$

$($Hint: Cash received will be the present value of the bond, present value tables are in Appendix A of our eText$)$

Interest is to be paid annually on each January $1,$ beginning one year from date of issue.

$4.$ Delphinium Corp. reacquired $4,000$ shares of its common stock on January $12,20$XX for $$9\mathrm{.}00$ per share.

$5.$ On December $31,20$XX$,$ Delphinium Corp. declared the annual preferred dividend plus a $$1\mathrm{.}00$ per

share dividend on the outstanding common stock, all payable in cash on January $31$ of next year.

$6.$ Bought Debt Investments worth $$72,000$ for cash. Debt investments are expected to be held for

longer then a year

$7.$ On December $31,20$XX$,$ Delphinium Corp. estimates that the total amount of accounts receivable that$$

is uncollectible at year$-$end is $$22,550.$

$8.$ The building is being depreciated using the straight line method over $25$ years.

The salvage value is $$55,000.$

$9.$ The equipment is being depreciated using the straight line method over $10$ years.

The salvage value is $$10,000.$

$10.$ Sold the Land for $$750,000$ cash.

$11.$ The unearned rent for the current month was collected on December $1,20$XX$.$ The original

amount received was $6$ months' rent in advance $($December $1$ of this year through May $31$

of next year$).$

$12.$ The first cash interest payment on the $6\%$ bonds is due January $1$ of next year. The annual

interest on the bonds for $20$XX has not yet been recorded. Use the effective interest method.

$13.$ The Delphinium Corp. sold half of the Debt Investments for $$30,000$ cash

$14.$ The Delphinium Corp. must make an adjusting entry to accrue income tax expense on

Income Before Income Tax at a rate of $22\%.$ The taxes will not be paid until March of next year.

Instructions:

$($a$)$ Prepare journal entries for the transactions listed above.

$($b$)$ Prepare an updated December $31,20$XX trial balance.

$($c$)$ Prepare a multiple$-$step income statement for the year ending December $31,20$XX$.$

$($d$)$ Prepare a retained earnings statement for the year ending December $31,20$XX$.$

$($e$)$ Prepare a classified balance sheet as of December $31,20$XX$.$

$($f$)$ Prepare a Statement of Cash Flows as of December $31,20$XX$.$

$($g$)$ and $($h$)$ Calculate and analyze the following ratios, clearly presenting your work and answers:

$1.$ Working Capital $5.$ Ratio of Fixed Assets to Long$-$term liabilities

$2.$ Current Ratio $6.$ Times Interest Earned

$3.$ EPS $7.$ Ratio of Free Cash Flow

$4.$ Price$-$Earnings $($P$/$E$)$ Ratio