Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

I need help with Parts 1 and 2. Part 1: Journal Entries A. Issued 5500 shares of $10 par common stock at $11, receiving cash.

I need help with Parts 1 and 2.

Part 1: Journal Entries A. Issued 5500 shares of $10 par common stock at $11, receiving cash. (6 points) B. Issued $ 110000 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, 17600 shares of common stock were outstanding. (3 points) D. Paid cash dividend from (c) above. (2 points) E. Purchased 6600 shares of Jones Company for $10 per share, plus $3300 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 (6 points) market price was $ 25 per share. There were 17600 Shares outstanding. G. Distributed the stock dividends declared in (F). (2 points) H. Purchased $5000 of 5% bonds at par. (3 points) Interest is payable semiannually. I. Purchased 330 shares of treasury common stock for $12 per share. (3 points) J. Received semiannual interest from bonds purchased in (H). (3 points) K. Received a total cash dividend of $660 from Jones Company. (3 points) L. Received a $1100 dividend from our investment in Masco Company stock. This investment is accounted for under the equity method. (3 points) M. Sold, at $17 per share, 165 shares of treasury common stock purchased in (I). (6 points) N. Sold 1320 shares of Jones company stock purchased in (E) for $13 per share, including commission. (6 points) O. Masco Company's total earnings are $55000. 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. The amortization is determined using the straight-line method. (6 points) Round all calculations to the nearest dollar. Part 2 Instructions: Page 2 Debit Credit Cash 330,000 Accounts receivable 219,000 Allowance for doubtful accounts 11,000 Equity Investments at cost 55,000 Valuation allowance for Equity Investments 5,500 Merchandise inventory at lower of cost (FIFO) or market 22,000 Prepaid expenses 3,300 Interest receivable 2,200 Investment in Masco Company stock 16,500 Store buildings and equipment 335,500 Accumulated depreciationstore buildings and equipment 165,000 Accounts payable 95,890 Income tax payable 2,000 Bonds payable, 10%, due in 10 years 110,000 Premium on bonds payable 5,500 Retained earnings, January 1, 20X1 250,855 Cash dividends , January 1, 20X1 balance 0 Stock Dividends, January 1, 20X1 balance 0 Common stock, $10 par (100,000 shares authorized; 12100 shares outstanding), January 1, 20X1 121,000 Paid-in capital in excess of parcommon stock, January 1, 20X1 12,100 Paid-in capital from sale of treasury stock, January 1, 20X1 0 Treasury stock, January 1, 20X1 0 Sales 770,000 Gain from sale of investment 1,100 Unrealized gain(loss) on Equity Investments 10,560 Dividend revenue 880 Interest revenue 2,970 Income of Masco Company 22,000 Cost of goods sold 440,000 Advertising expense $11,000 Depreciation expensestore buildings and equipment 7,700 Miscellaneous selling expenses 5,500 Sales commissions 22,000 Office rent expense 55,000 Office salaries expense 66,000 Miscellaneous administrative expenses 1,100 Interest expense 5,500 Income tax expense 44,000 Use the Student Input Form (Excel File) to complete the Financial Statements 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. 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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started