Financial Accounting - Project 2 Name 150 points Part 1 Instructions: Page 1 1200 (For Instructor: Even 100's between 100 and 4000) Record the following journal entries for ABC Corporation on the journal in the provided Student Input Form (Excel file). Use the letter for each as the date. Requirements and Basic Instructions: 1. Each student should complete the project on an individual basis. Tutors and others are not allowed to help students on the project. If a project is not completed on an independent, individual basis, the student will receive zero points for the project. 2. Instructors can only answer questions on the project in general. 3. Students should complete the project and turn it in to the dropbox by the due date. The instructor reserves the right to not accept late projects or deduct points on projects turned in past the due date. 4. There are different versions of the project that will be assigned (course mailed) by the instructor. 5. By submitting in the Canvas dropbox you are "signing" that you have followed the instructions above. Journal Entries A. Issued 6000 shares of $10 par common stock at $11, receiving cash. (6 points) B. Issued $ 120000 of 10 year 10% bonds at a market (effective) interest rate of 9%, with interest payable semiannually. (6 points) Use the Present Value Tables in Appendix A of text book. Round all calculations to the nearest dollar. C. Declared a dividend of $0.25 per share on common stock. On date of declaration. 19200 shares of common stock were outstanding. (3 points) D. Paid cash dividend from (c) above. (2 points) E. Purchased 7200 shares of Jones Company for $10 per share, plus $3600 commission. Our company purchased less than 20% of the outstanding stock of Jones Company. (3 points) F. Declared a 5% stock dividend on the $10 par common stock when the market price was $25 per share. There were 19200 Shares outstanding. (6 points) G. Distributed the stock dividends declared in (F). H. Purchased $5000 of 5% bonds at par. Interest is payable semiannually. 1. Purchased 360 shares of treasury common stock for $12 per share. J. Received semiannual interest from bonds purchased in (H). (2 points) (3 points) (3 points) (3 points) K. Received a total cash dividend of $720 from Jones Company. L. Received a $1200 dividend from our investment in Masco Company stock. This investment is accounted for under the equity method. (3 points) (3 points) M. Sold, at $17 per share, 180 shares of treasury common stock purchased in (I). (6 points) N. Sold 1440 shares of Jones company stock purchased in (E) for $13 per share, including commission. (6 points) O. Masco Company's total earnings are $60000. We own 40%. Record the earnings for our company using the equity method. (3 points) P. Sold the bonds purchased in (H) at 103 plus $63 in accrued interest. (8 points) Q. At the end of the accounting period, the remaining shares of Jones Company stock increased $2.00 per share (3 Points) R. Record the payment of semiannual interest on the bonds issued in (B) and the amortization of the premium for six months. Round all calculations to the nearest dollar. The amortization is determined using the straight-line method. (6 points) Part 2 Instructions: Page 2 The balances listed below are for December 31 and already include the journal entries you just prepared except for the stockholders' equity accounts. The balances listed for the stockholders' equity accounts are the January 1 balances. You will need to utilize the journal entries you just prepared to complete the Statement of Stockholders' Equity. Prepare a multistep income statement, a statement of stockholders' equity, and a classified balance sheet in good form for the year ended December 31, 20X1. Use the Student Input Form (Excel File) to complete the Financial Statements Debit Credit Cash 360,000 Accounts receivable 239,000 Allowance for doubtful accounts 12,000 Equity Investments at cost 60,000 6,000 Valuation allowance for Equity Investments Merchandise inventory at lower of cost (FIFO) or market 24,000 Prepaid expenses 3,600 Interest receivable 2,400 Investment in Masco Company stock 18.000 Store buildings and equipment 366,000 Accumulated depreciation-store buildings and equipment 180,000 Accounts payable 104,880 Income tax payable 2,000 Bonds payable, 10%, due in 10 years 120,000 Premium on bonds payable 6,000 Retained earnings, January 1, 20X1 273,660 Cash dividends, January 1, 20X1 balance 0 Stock Dividends, January 1, 20X1 balance Common stock, $10 par (100,000 shares authorized; 13200 shares outstanding), January 1, 20X1 132,000 Paid-in capital in excess of par-common stock, January 1, 20X1 13,200 Paid-in capital from sale of treasury stock, January 1, 20X1 0 Treasury stock, January 1, 20X1 Sales Gain from sale of investment Unrealized gain(loss) on Equity Investments Dividend revenue 0 840,000 1,200 11,520 960 Interest revenue 3,240 Income of Masco Company 24,000 Cost of goods sold 480,000 Advertising expense $12,000 Depreciation expense-store buildings and equipment 8.400 Miscellaneous selling expenses 6.000 Sales commissions 24,000 Office rent expense 60.000 Office salaries expense Miscellaneous administrative expenses Interest expense Income tax expense 72,000 1,200 6.000 48,000 8 0 21 22 23 24 Journal Entries 2-8 points each (75 points) 2 3 A B ABC Corporation, Inc. Statement of Stockholders' Equity For the Year Ended December 31, 20X1 D E F G Page 6 (12 points) Common Stock Paid-in Capital in Excess of Par Common Stock Paid-in Capital from sale of Retained Earnings Treasury Stock Total Treasury Stock 0 0 4 5 Balances, January 1 6 Issued common stock 7 Net income 8 Cash dividends 9 Stock dividends 10 Sale of treasury stock 11 Purchase of treasruy stock 12 Balances December 31 13 14 15 16 17 ABC Corporation, Inc. Balance Sheet December 31, 20X1 Assets Page 7 E (36 points) 7 0 Liabilities Stockholders' Equity