General journal, T Accounts, to adjusted trial balance with additional questions
Name Financial Statement Homework #3 Part At November 30, 2012. Silver Traders Company had the following trial balance. There is information on the next page about December 2012 transactions that need to be recorded Silver Traders Company Trial Balance 11 /12 287,000 62,000 24,000 6,000 65,000 195.000 75,000 44,000 45.000 46,000 15,000 Accounts Receivable Allowance for Doubtful Accounts Short Term Note Receivable Supplies Triventory Equipment Building Accumulated Depreciation Copyright Accounts Payable Dividends Payable Interest Payable Uncanned Revenue ST Note Payable LT Mortgage Payable Bonds Payable Premium on Bonds Payable Common Stock - $1 par Paid In Capital In Excess of Par-CS Preferred Stock - $5 par Paid In Capital In Excess of Par-PS Treasury Stock Retained Earnings Dividends Sales Revenue Sales Returns & Allowances Sales Discounts Cost of Goods Sold Bad Debts Expense Depreciation Expense Wages Expense Rent Expense Insurance Expense Supplies Expense Interest Revenue Interest Expense Gain on Sale of Equipment Income Tax Expense Total 200,000 26,840 3,000 86,000 1,000 50,000 105,000 5.000 819,000 3,840 9,000 380,000 5,000 50,000 260,000 63,000 16,000 6,000 1,000 8,000 15,000 4,000 1,492,840 1,492,840 Page 1 of 9 ACC DATE Instructions: You must turn in the work performed on the sheets printed with this page. This wu ACCEPTED ON PLAIN PAPER Write the journal entries (on the following General Journal page) required for each of the described below. Write the entries in the order described below (41 - #8). Use ONLY the accounts listed on the trial balance for your journal entries. Post the transactions to individual T-accounts and prepare an adjusted trial balance for Company as of December 31, 2012. ance for Silver The 1. The company purchased a building December 1, 2012 with a LT Mortgage Payable of $150,000 at interest. (Record the purchase of the building.) 2. The company issued 500 shares of Common Stock for $6,000 on December 25, 2012. 3. On December 29, 2012 the company declared a cash dividend of $3.00 per share for common stock shares issued and declared (including the additional 500 shares declared on December 25.) 4. The terms of the LT mortgage payable from #1 above require the company to make monthly installment payments over the term of the loan. Each payment consists of interest on the unpaid balance of the loan and a reduction of loan principal. Record the first monthly payment of $1,900 on the LT Mortgage Pavabla on December 31, 2012. 5. The company last paid interest on the ST note payable on November 1, 2012. Record the accrued interest expense for the last 2 months of 2012. The annual interest rate is 8%. Round to nearest whole dollar. 6. The Bonds Payable and related Premium amounts on the Nov. trial balance relate to the Jan 1, 2012 issuance of the following bonds: On Jan. 1, 2012, the company issued 10%, 10-year bonds when the market rate for similar investments was 8%. The company pays interest each year on January 1. On Dec 31, 2012, use the effective interest method of amortizing the premium on bonds payable to accrue the interest expense for 2012 and the effective interest rate is 8%. Round your interest expense calculation to the nearest whole dollar Use the efferents was 89 012the compov, trial bala 7. The Unearned Revenue amount on the Nov. trial balance relates to amounts that the company previously collected in cash for sales that were to be completed in the future. The company completed some of these sales during December and now owes only $16,000 of that unearned revenue. Record the necessary adjustment for December 31, 2012. 8. On December 31, 2012, the company purchased 50 shares of its own Preferred Stock for Treasury Stock for $11 per share. Page 2 of 9 GENERAL JOURNAL DATE ACCOUNT NAME DEBIT CREDIT Page 3 of 9 Use the space below for T-accounts (REQUIRED). (Specific instructions: Prepare T-accounts for each account affected by a journal entry. Write in unadjusted balance for each of these accounts (from page 1). the unadjusted balance might be debit, a credit, or zero balance. Now you are ready to post your journal entries from page 3 ore corresponding T-accounts and then calculate adjusted balances.) Page 4 of 9 Silver Traders Company ADJUSTED TRIAL BALANCE 12/31/12 Accounts Receivable Allowance for Accounts Short Term Not Receivable Supplies Inventory Accumulated Depreciation Copyright Accounts Payable Dividends Payable Interest Payable Unearned Revenue ST Note Payable LT Mortgage Payable Bonds Payable Premium on Bonds Payable Common Stock - $1 par Paid In Capital In Excess of Par-CS Preferred Stock - $5.par Paid in Capital In Excess of Par-PS Treasury Stock Retained Earnings Dividends Sales Revenue Sales Returns & Allowano Sales Discounts Cost of Goods Sold Bad Debts Expense Depreciation Expense Wages Expense Rent Expense Insurance Expense Supplies Expense Interest Revenue Interest Expense Gain on Sale of Equipment Income Tax Expense Page 5 of 9 1. What is the effect on the accounting equation when Treasury Stock is purchased? Assets Liabilities + Stockholders' Equity (fill in blanks with arrows to indicate what cha and in which direction) Part 2: the Mu Class criti 2. How many Common Stock shares are outstanding at 12/31/2012? (HINT: Remembe the treasury shares purchased on 12/31/2012 were Preferred Shares, not Common Sha 3. If this company had a common stock 3-1 stock split on Dec. 31, 2012: a. How many shares would there be after the split? b. What is the par value per share in dollars after the split? 4. Does the Carrying Value of the Bonds Payable and Premium Increase or decrease over the life of the bonds? 5. What will be the balance in the Mortgage Payable Account at Jan. 31, 2013 after the second monthly payment is made? 6. The Company is about to issue $2,000,000 of 5-year, 12% bonds. Interest will be paid semi- annually. The market interest rate for such securities is 10% How much can The Company expect to receive from the sale (issuance) of these bonds? Page 6 of 9
