Homework: Extra Credit Score: 0 of 1 pt Comp13-1 (similar to) Save 1 of 1 (0 complete) HW Score: 0%, 0 of 1 pt Question Help Following is the chart of accounts for The Archdale Company. As a new business, all beginning The Archdale Company is a retail company that began operations on October 1, 2018, when it incorporated in the state of North Carolina The Archdale Company is authorized to issue 250,000 balances are $O shares of $1 par value common stock and 70000 shares of 4% $40 par value pret med stock The dek the iontoview the dan of a our . company sells a product that includes a one-year warranty and records estimated warranty payable each month Customers are charged a 6% state sales tax The company uses a perpetual inventory system. There are three employees that are paid a monthly salary on the last day of the month. The Archdale Company completed the following transactions during the last quarter of 2018, its first year of operations Click the icon to view the transactions) Read the tequrements Requirement 1a. In preparation for recording the transactions, prepare: An amortization schedule for she first 3 months of the mortgage payable issued on October 1. Round interest calculations to the nearest dollar Beginning Principal Interest Total Ending Balance Payment Expense Payment Balance 10/01/2018 11/1/2018 12/1/2018 01/01/2019 Enter any number in the edit fields and then click Check Answer parts remaining Clear All Check Answer O Type here to seanch 1. In preparation for recording the transactions, prepare: An amortization schedule for the first 3 months of the mortgage payable issued on October 1. Round interest calculations to the nearest dollar. Payroll registers for October, November, and December. All employees worked October 1 through December 31 and are subject to the following FICA taxes: OASDI: 6.2% on first $1 18,500 earned: Medicare: 1 45% up to $200,000, 2.35% on earnings above $200,000. Additional payroll information includes: a. b. Monthly Federal Health Employee Salary Income Tax Insurance Karen Jenning Marissa Schaefer Sheila Morgan 5,900 $ 5,500 2,600 1,770 $ 1.100 390 125 125 125 c. Calculations for employer payroll taxes liabilities for October, November, and December OASDI: 6.2% on first $1 18,500 earned: Medicare: 1.45%; SUTA: 5 4% on first $7,000 earned; FUTA: 0.6% on first $7,000 earned. 2. Record the transactions in the general journal. Omit explanations. 3. Post to the general ledger. 4. Record adjusting entries for the three month period ended December 31, 2018: a. b. c. d. Depreciation on the Building, straight-line, 40 years, no residual value. Depreciation on Store Fixtures, straight-line, 20 years, no residual value. Accrued interest expense on the note payable for the store fixtures. Accrued interest expense on the mortgage payable. e. Accrued income tax expense of $34,000. 5. 6. Post adjusting entries and prepare an adjusted trial balance. Prepare a multi-step income statement and statement of retained earnings for the quarter ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. Assume that $10,157 of the mortgage payable is due within the next year Evaluate the company's success for the first quarter of operations by calculating the following ratios. The market price of the common stock is $44 on December 31, 2018. Round to two decimal places. a. Times interest earned b. Debt to equity c. Earnings per share d. Price/earnings ratio e. Rate of return on common stock 7. 8. The Archdale Company wants to expand and is considering options for raising additional cash. The company estimates net income before the expansion of $220,000 in 2019 and that the expansion will provide additional operating income of $82,000 in 2019. The company intends to sell the shares of treasury stock, so use issued shares for the analysis rather than current shares outstanding. Compare these options, assuming a 20% income tax rate: Plan 1: Issue 5,000 additional shares of common stock for $50 per share Plan 2: Issue $120,000 in 10-year, 20% bonds payable. Which option will contribute more net income in 2019? Which option provides the highest EPS? The Tusquittee Company Chart of Accounts Dividends Payable- Common Cash Merchandise Inventory Land Building Store Fixtures Accumulated Depreciation Accounts Payable Employee Income Taxes Payable FICA-OASDI Taxes Payable FICA-Medicare Taxes Payable Employee Health Insurance Payable Federal Unemployment Taxes Payable State Unemployment Taxes Payable Income Tax Payable Sales Tax Payable Estimated Warranty Payable Interest Payable Notes Payable Mortgages Payable Common Stock-$1 Par Value Paid-in Capital in Excess of Par-Common Paid-in Capital from Treasury Stock Transactions Retained Earnings Treasury Stock-Common Cash Dividends Sales Revenue Cost of Goods Sold Salaries Expense Payroll Tax Expense Utilities Expense Depreciation Expense Warranty Expense Income Tax Expense Interest Expense Oct 1 Issued 30,000 shares of $1 par value common stock for cash of $25 per share. issued a $160,000, 10-year, 9% mortgage payable for land with an existing store building. Mortgage payments of $2,000 are due on the first day of each month, beginning November 1. The assets had the following market values: Land, $80,000; Building $80,000. issued a one-year, 6% note payable for $17,200 for store fixtures. The principal and interest are due October 1, 2019. 1 1 3 Purchased merchandise inventory on account from Elite Supply for $126,000, terms n/30. 15 Paid $210 for utilities. 31 Recorded cash sales for the month of $155,000 plus sales tax of 6%. The cost of the goods sold was $93,000 and estimated warranty payable was 6%. 31 Recorded October payroll and paid employees 31 Accrued employer payroll taxes for October Nov. 1 Paid the first mortgage payment. 3 Paid Elite Supply for the merchandise inventory purchased on October 3. 10 Purchased merchandise inventory on account from Elite Supply for $170,000, terms n/30. 12 Purchased 900 shares of treasury stock for $11 per share. 15 Paid all liabilities associated with the October 31 payroll. 15 Remitted (paid) sales tax from October sales to the state of North Carolina. 16 Paid $8,000 to satisfy warranty claims. 17 Declared cash dividends of $1 per outstanding share of common stock. 18 Paid $360 for utilities. 27 Paid the cash dividends. 30 Recorded cash sales for the month of $130,000 plus sales tax of 6%. The cost of the goods sold was $78,000 and estimated warranty payable was 6%. 30 Recorded November payroll and paid employees 30 Accrued employer payroll taxes for November. Dec. 1 Paid the second mortgage payment 10 Paid Elite Supply for the merchandise inventory purchased on November 10 12 Paid $7,400 to satisfy warranty claims 15 Sold 550 shares of treasury stock for $17 per share 15 Paid all liabilities associated with the November 30 payrol 15 Remitted (paid) sales tax from November sales to the state of North Carolina. 18 Paid $180 for utilities. Purchased merchandise inventory on account from Elite Supply for $100,000, terms n/30 Recorded cash sales for the month of $250,000 plus sales tax of 6%. The cost of the goods sold was $150,000 and estimated warranty payable was 696. Recorded December payroll and paid employees. Accrued employer payroll taxes for December. 19 31 31 31