If you have time can you help me with these i will post the due date for dec 18

Chapter 10 Problems 1. Hartford Research issues bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds have a $31,000 par value and an annual contract rate of 12%, and they mature in 10 years. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided. Round all table values to 4 decimal places, and use the rounded table values in calculations.) Required: Consider each of the following three separate situations. 1. The market rate at the date of issuance is 10%. (a) Complete the below table to determine the bonds' issue price on January 1, 2015. (b) Prepare the journal entry to record their issuance. 2. The market rate at the date of issuance is 12%. (a) Complete the below table to determine the bonds' issue price on January 1, 2015. (b) Prepare the journal entry to record their issuance. 3. The market rate at the date of issuance is 14%. (a) Complete the below table to determine the bonds' issue price on January 1, 2015. (b) Prepare the journal entry to record their issuance. 2. Hillside issues $1,300,000 of 7%, 15-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,123,346. Required: 1. Prepare the January 1, 2015, journal entry to record the bonds' issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment 2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4 Prepare the first two years of an amortization table using the straight-line method. 5 Prepare the journal entries to record the first two interest payments. 3. Legacy issues $740,000 of 7.5%, four-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $680,186 and their market rate is 10% at the issue date. 1. Prepare the January 1, 2015, journal entry to record the bonds' issuance. 4. 2. Determine the total bond interest expense to be recognized over the bonds' life. 5. 3. Prepare a straight-line amortization table for the bonds' first two years. 6. 4. Prepare the journal entries to record the first two interest payments. 7. On November 1, 2015, Norwood borrows $480,000 cash from a bank by signing a five-year installment note bearing 5% interest. The note requires equal total payments each year on October 31. ( Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) Required: 1. Complete the below table to calculate the total amount of each installment payment. 2. Complete an amortization table for this installment note. (Round your intermediate calculations to the nearest dollar amount.) e}ru:td"rew enssA"i",:"n"ioptrisc 0 test 13252703191808 3. Prepare the journal entries in which Norwood records the following: (a) Accrued interest as of December 31, 2015 (the end of its annual reporting period). (b) The first annual payment on the note. 8. At the end of the current year, the following information is available for both Pulaski Company and Scott Company. Pulaski Company Scott Company Total assets $ 2,320,500 $ 1,189,500 Total liabilities 838,500 532,500 Total equity 1,482,000 657,000 Required: 1. Compute the debt-to-equity ratios for both companies. 9. Ike issues $260,000 of 9%, three-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $266,811. Their market rate is 8% at the issue date. Required: 1. Prepare the January 1, 2015, journal entry to record the bonds' issuance. 10. 2. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 11. Prepare an effective interest amortization table for the bonds' first two years. (Enter all amounts positive values.) 12. 4. Prepare the journal entries to record the first two interest payments. 13. 5. Prepare the journal entry to record the bonds' retirement on January 1, 2017, at 98. 14. Rogers Company signs a five-year capital lease with Packer Company for office equipment. The annual year-end lease payment is $24,000, and the interest rate is 7%. ( Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) 1. Complete the below table to calculate the present value of Roger's five-year lease payments. 15. 2. Prepare the journal entry to record Roger's capital lease at its inception. 16. 3. Complete a lease payment schedule for the five years of the lease with the following headings. Assume that the beginning balance of the lease liability is the present value of lease payments. 17. Use straight-line depreciation and prepare the journal entry to depreciate the leased asset at the end of year 1. Assume zero salvage value and a five-year life for the office equipment. Chapter 11 Problems 2. Kohler Corporation reports the following components of stockholders' equity on December 31, 2015: Common stock$15 par value, 100,000 shares authorized, 45,000 shares issued and outstanding $ 675,000 Paid-in capital in excess of par value, common stock 60,000 Retained earnings 370,000 Total stockholders' equity $ 1,105,000 In year 2016, the following transactions affected its stockholders' equity accounts. Jan. 1 Purchased 5,000 shares of its own stock at $25 cash per share. Jan. 5 Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record. Feb. 28 Paid the dividend declared on January 5. July 6 Sold 1,875 of its treasury shares at $29 cash per share. Aug. 22 Sold 3,125 of its treasury shares at $22 cash per share. Sept. 5 Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record. Oct. 28 Paid the dividend declared on September 5. Dec. 31 Closed the $408,000 credit balance (from net income) in the Income Summary account to Retained Earnings. Prepare the Journal entries to record each of these transactions for 2016 (there are 8 entries) 3. Prepare a statement of retained earnings for the year ended December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.) 4. Prepare the stockholders' equity section of the company's balance sheet as of December 31, 2016 5. At September 30, the end of Beijing Company's third quarter, the following stockholders' equity accounts are reported. Common stock, $12 par value $ 420,000 Paid-in capital in excess of par value, common stock 100,000 Retained earnings 360,000 In the fourth quarter, the following entries related to its equity are recorded: Date General Journal Oct. 2 Retained Earnings Common Dividend Payable Oct. 25 Common Dividend Payable Cash Oct. 31 Retained Earnings Common Stock Dividend Distributable Paid-In Capital in Excess of Par Value, Common Stock Nov. 5 Common Stock Dividend Distributable Common Stock, $12 Par Value Dec. 1 MemoChange the title of the common stock account to reflect the new par value of $4. Dec. 31 Income Summary Retained Earnings Debit 60,000 Credit 60,000 60,000 60,000 83,000 40,000 43,000 40,000 40,000 260,000 260,000 Complete the following table showing the equity account balances at each indicated date. 6. The equity sections from Atticus Group's 2015 and 2016 year-end balance sheets follow. Stockholders' Equity (December 31, 2015) Common stock$5 par value, 50,000 shares authorized, 35,000 shares issued and outstanding $ 175,000 Paid-in capital in excess of par value, common 135,000 stock Retained earnings 320,000 Total stockholders' equity Stockholders' Equity (December 31, 2016) Common stock$5 par value, 50,000 shares authorized, 41,000 shares issued, 5,000 shares in treasury Paid-in capital in excess of par value, common stock Retained earnings ($50,000 restricted by treasury stock) $ $ 205,000 177,000 400,000 782,000 (50,000) Less cost of treasury stock Total stockholders' equity 630,000 $ 732,000 The following transactions and events affected its equity during year 2016. Jan. Mar. Apr. July July Aug. Oct. 5 20 5 5 31 14 5 Declared a $0.40 per share cash dividend, date of record January 10. Purchased treasury stock for cash. Declared a $0.40 per share cash dividend, date of record April 10. Declared a $0.40 per share cash dividend, date of record July 10. Declared a 20% stock dividend when the stock's market value is $12 per share. Issued the stock dividend that was declared on July 31. Declared a $0.40 per share cash dividend, date of record October 10. 1. How many common shares are outstanding on each cash dividend date? 7. 2. What is the total dollar amount for each of the four cash dividends? 8. 3. What is the amount of the capitalization of retained earnings for the stock dividend? 9. 4. What is the per share cost of the treasury stock purchased? (Round your answer to 2 decimal places.) 10. 5. How much net income did the company earn during year 2016? 11. Raphael Corporation's common stock is currently selling on a stock exchange at $179 per share, and its current balance sheet shows the following stockholders' equity section: Preferred stock5% cumulative, $___ par value, 1,000 shares authorized, issued, and outstanding $ 95,000 Common stock$___ par value, 4,000 shares authorized, issued, and outstanding 100,000 Retained earnings 310,000 Total stockholders' equity $ 505,000 1. What is the current market value (price) of this corporation's common stock? 12. 2. What are the par values of the corporation's preferred stock and its common stock? 13. 3.If no dividends are in arrears, what are the book values per share of the preferred stock and the common stock? 14. 4.If two years' preferred dividends are in arrears, what are the book values per share of the preferred stock and the common stock? 15. 5. If two years' preferred dividends are in arrears and the preferred stock is callable at $105 per share, what are the book values per share of the preferred stock and the common stock? 16. 6.1If two years' preferred dividends are in arrears and the board of directors declares cash dividends of $27,800, what total amount will be paid to the preferred and to the common shareholders? 6.2What is the amount of dividends per share for the common stock? (Round your answer to two decimal places.) Problem 1 Hartford Research issues bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds have a $31,000 par value and an annual contract rate of 12%, and they mature in 10 years. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided. Round all table values to 4 decimal places, and use the rounded table values in calculations.) Required Consider each of the following three separate situations. (R1) The market rate at the date of issuance is 10%. a. Calculate the bond's issue price on 1 January 2015. $31,0001.0520 + $31,0000.06 b. 1 1.0520 = $34,863.29 0.05 Prepare the journal entry to record their issuance. 34,863.29 Cash Premium on Bonds Payable Bonds Payable 3,863.29 31,000.00 (R2) The market rate at the date of issuance is 12%. a. Calculate the bond's issue price on 1 January 2015. $31,0001.0620 + $31,0000.06 1 1.0620 = $31,000 0.06 (R3) The market rate at the date of issuance is 14%. a. Calculate the bond's issue price on 1 January 2015. $31,0001.0720 + $31,0000.06 b. 1 1.0720 = $27,715.86 0.07 Prepare the journal entry to record their issuance. 27,715.86 3,284.14 Cash Discount on Bonds Payable Bonds Payable 31,000.00 Problem 2 Hillside issues $1,300,000 of 7%, 15-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,123,346. (R1) a. Prepare the January 1, 2015, journal entry to record the bonds' issuance. 1,123,346.00 176,654.00 Cash Discount on Bonds Payable Bonds Payable Page 1 1,300,000.00 (R2) a. The semiannual cash payment is calculated as follows. $1,300,0003.5% = $45,500 b. The straight-line discount amortization is calculated as follows. $176,654 / 30 = $5,888.47 c. Bond interest expense is calculated as follows. Semiannual cash payment Straight-line discount amortization Semiannual bond interest expense 45,500.00 5,821.80 51,321.80 Total payments at maturity [$1,300,000 + $45,500 30] Amount borrowed Total bond interest expense 2,665,000 (1,123,346) 1,541,654 (R3) (R4) Semiannual Period-End January 1, 2015 June 30, 2015 December 31, 2015 June 30, 2016 December 31, 2016 Interest Payment Interest Expense 45,500.00 45,500.00 45,500.00 45,500.00 Principal 51,388.47 51,388.47 51,388.47 51,388.47 Carrying Value 5,888.47 5,888.47 5,888.47 5,888.47 1,123,346.00 1,129,234.47 1,135,122.93 1,141,011.40 1,146,899.87 (R5) 30 Jun 2015 31 Dec 2015 Interest Expense Discount on Bonds Payable Cash 51,388.47 Interest Expense Discount on Bonds Payable Cash 51,388.47 5,888.47 45,500.00 5,888.47 45,500.00 Problem 3 Legacy issues $740,000 of 7.5%, four-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $680,186 and their market rate is 10% at the issue date. (R1) Prepare the January 1, 2015, journal entry to record the bonds' issuance. Cash Discount on Bonds Payable Bonds Payable 680,186.00 59,814.00 740,000.00 Problem 4 (R2) Determine the total bond interest expense to be recognized over the bond's life. Total payments at maturity [$740,000 + $740,000 7.5%/2 8] Amount borrowed Total bond interest expense Problem 5 Page 2 962,000 (680,186) 281,814 (R3) Interest Payment Semiannual Period-End January 1, 2015 June 30, 2015 December 31, 2015 June 30, 2016 December 31, 2016 Problem 6 (R4) 30 Jun 2015 31 Dec 2015 Interest Expense 27,750.00 27,750.00 27,750.00 27,750.00 Principal 35,226.75 35,226.75 35,226.75 35,226.75 7,476.75 7,476.75 7,476.75 7,476.75 Interest Expense Discount on Bonds Payable Cash 35,226.75 Interest Expense Discount on Bonds Payable Cash 35,226.75 Carrying Value 680,186.00 687,662.75 695,139.50 702,616.25 710,093.00 7,476.75 27,750.00 7,476.75 27,750.00 Problem 7 On November 1, 2015, Norwood borrows $480,000 cash from a bank by signing a ve-year installment note bearing 5% interest. The note requires equal total payments each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) a. The total amount of each installment payment is calculated as follows. $480,000 b. 1 1.055 = $110,867.90 0.05 Complete an amortization table for this installment note. Periods Beginning Balance Annual Payment Principal Interest 31 Oct 2015 Ending Balance 480,000.00 31 Oct 2016 110,867.90 86,867.90 24,000.00 393,132.10 31 Oct 2017 393,132.10 110,867.90 91,211.30 19,656.60 301,920.80 31 Oct 2018 301,920.80 110,867.90 95,771.86 15,096.04 206,148.94 31 Oct 2019 206,148.94 110,867.90 100,560.46 10,307.45 105,588.48 31 Oct 2020 c. 480,000.00 105,588.48 110,867.90 105,588.48 5,279.42 0.00 Prepare the journal entries in which Norwood records the following: Page 3 4,000.00 December 31, 2015 Interest Expense Interest Payable Problem 7B October 31, 2016 Interest Payable Interest Expense Notes Payable Cash 4,000.00 20,000.00 86,867.90 4,000.00 110,867.90 Problem 8 At the end of the current year, the following information is available for both Pulaski Company and Scott Company. Total assets Total liabilities Total equity Pulaski Company 2,320,500 838,500 1,482,000 Scott Company 1,189,500 532,500 657,000 Compute the debt-to-equity ratios for both companies. Total liabilities Total equity Debt-to-equity ratios Pulaski Company 838,500 1,482,000 0.57 Scott Company 532,500 657,000 0.81 Problem 9 Ike issues $260,000 of 9%, three-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $266,811. Their market rate is 8% at the issue date. (R1) Prepare the January 1, 2015, journal entry to record the bonds' issuance. 266,811.00 Cash Premium on Bonds Payable Bonds Payable 6,811.00 260,000.00 Problem 10 (R2) Determine the total bond interest expense to be recognized over the bonds' life. Page 4 70,200.00 260,000.00 (266,811.00) 63,389.00 Total cash interest payments [$260,000 4.5% 6] Par value at maturity Amount borrowed Total bond interest expense Problem 11 (R3) Prepare an eective interest amortization table for the bond's rst two years. Periods Cash Interest Paid Bond Interest Expense Premium Amortization Unamortized Premium Carrying Value 1 Jan 2015 266,814.78 30 Jun 2015 11,700.00 10,672.59 1,027.41 5,787.37 265,787.37 31 Dec 2015 11,700.00 10,631.49 1,068.51 4,718.86 264,718.86 30 Jun 2016 11,700.00 10,588.75 1,111.25 3,607.62 263,607.62 31 Dec 2016 11,700.00 10,544.30 1,155.70 2,451.92 262,451.92 30 Jun 2017 11,700.00 10,498.08 1,201.92 1,250.00 261,250.00 31 Dec 2017 11,700.00 10,450.00 1,250.00 0.00 260,000.00 Problem 12 (R4) Prepare the journal entries to record the rst two interest payments. 30 Jun 2015 31 Dec 2015 Interest Expense Premium on Bonds Payable Cash 10,672.59 1,027.41 Interest Expense Premium on Bonds Payable Cash 10,631.49 1,068.51 11,700.00 11,700.00 Problem 13 (R5) Prepare the journal entry to record the bonds' retirement on January 1, 2017, at 98. 1 Jan 2017 Bonds Payable Premium on Bonds Payable Gain on Retirement Cash [$260,000 0.98] 260,000.00 2,451.92 7,651.92 254,800.00 Problem 14 Rogers Company signs a ve-year capital lease with Packer Company for oce equipment. The annual year-end lease payment is $24,000, and the interest rate is 7%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) (R1) The present value of Roger's ve-year lease payments is calculated as follows. $24,000 1 1.075 = $98,404.74 0.07 Problem 15 (R2) Prepare the journal entry to record Roger's capital lease at its inception. Page 5 98,404.74 Leased Office Equipment Lease Liability 98,404.74 Problem 16 (R3) Complete a lease payment schedule for the ve years of the lease with the following headings. Assume that the beginning balance of the lease liability is the present value of lease payments. Periods Beginning Annual Payment Principal Interest Year 0 Ending Balance 98,404.74 Year 1 98,404.74 24,000.00 17,111.67 6,888.33 81,293.07 Year 2 81,293.07 24,000.00 18,309.49 5,690.51 62,983.59 Year 3 62,983.59 24,000.00 19,591.15 4,408.85 43,392.44 Year 4 43,392.44 24,000.00 20,962.53 3,037.47 22,429.91 Year 5 22,429.91 24,000.00 22,429.91 1,570.09 0.00 Problem 17 (R4) Use straight-line depreciation and prepare the journal entry to depreciate the leased asset at the end of year 1. Assume zero salvage value and a ve-year life for the oce equipment. 19,680.95 Depreciation Expense Accumulated Depreciation Depreciation: $98,404.74 = $19,680.95 5 Page 6 19,680.95 Problem 2 Common stock$15 par value, 100,000 shares authorized, 45,000 shares issued and outstanding 675,000 60,000 Paid-in capital in excess of par value, common stock 370,000 Retained earnings Total stockholders' equity 1,105,000 In year 2016, the following transactions aected its stockholders' equity accounts. Jan. 1 Purchased 5,000 shares of its own stock at $25 cash per share. 5 Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record. Feb. 2 Paid the dividend declared on January 5. Jul. 6 Sold 1,875 of its treasury shares at $29 cash per share. Aug. 22 Sold 3,125 of its treasury shares at $22 cash per share. Sept. 5 Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record. Oct. 28 Paid the dividend declared on September 5. Dec. 31 Closed the $408,000 credit balance (from net income) in the Income Summary account to Retained Earnings. January 1 January 5 February 2 July 6 August 22 September 5 Treasury Shares Cash To record purchase of treasury shares 125,000 Retained Earnings Cash Dividends Payable To record declaration of cash dividends [(45,000 sh - 5,000 sh) $4] 160,000 Cash Dividends Payable Cash To record payment of cash dividends 160,000 Cash Share Premium Treasury Shares Treasury Shares To record sale of treasury shares 54,375 Cash Share Premium Treasury Shares Retained Earnings Treasury Shares To record sale of treasury shares 68,750 7,500 1,875 Retained Earnings Cash Dividends Payable To record declaration of cash dividends [45,000 sh $4] 180,000 Page 1 625,000 160,000 160,000 7,500 46,875 78,125 180,000 October 28 180,000 Cash Dividends Payable Cash To record payment of cash dividends 180,000 408,000 December 31 Income Summary Retained Earnings To record closing of net income to retained earnings 408,000 Problem 4 Kohler Corporation Statement of Retained Earnings For the Year Ended December 31, 2016 Retained Earnings, January 1, 2016 Net income for the year Cash dividends declared and paid Loss on sale of treasury shares Retained Earnings, December 31, 2016 US$ 370,000 408,000 (340,000) (1,875) US$ 436,125 Problem 4 Common stock$15 par value, 100,000 shares authorized, 45,000 shares issued and outstanding Paid-in capital in excess of par value, common stock 675,000 60,000 Retained earnings 436,125 1,171,125 Total stockholders' equity Problem 5 Account: Date Common stock, $12 par value Particulars 30 Sep 2016 5 Nov 2016 Beginning Balance Distribution of stock dividends Account: Date 31 Oct 2016 5 Nov 2016 Common stock dividend distributable Particulars Debit Declaration of stock dividends Distribution of stock dividends 40,000 Account: Date Paid-in capital in excess of par value, common stock Particulars Debit Credit 30 Sep 2016 31 Oct 2016 Beginning Balance Declaration of stock dividends Account: Date Retained earnings Particulars 30 Sep 2016 2 Oct 2016 31 Oct 2016 Beginning Balance Declaration of cash dividends Declaration of stock dividends Debit Credit 40,000 Credit 40,000 43,000 Debit 60,000 83,000 Page 2 Credit Balance Debit Credit 420,000 460,000 Balance Debit Credit 40,000 0 Balance Debit Credit 100,000 143,000 Balance Debit Credit 360,000 300,000 217,000 31 Dec 2016 260,000 Net income for the period 477,000 Problem 6 Common stock$5 par value, 50,000 shares authorized, 35,000 shares issued and outstanding 175,000 Paid-in capital in excess of par value, common stock 135,000 Retained earnings 320,000 Total stockholders' equity, December 31, 2015 630,000 Common stock$5 par value, 50,000 shares authorized, 41,000 shares issued and outstanding 205,000 Paid-in capital in excess of par value, common stock 177,000 Retained earnings ($50,000 restricted by treasury stock) 400,000 782,000 Cost of treasury stock (50,000) Total stockholders' equity, December 31, 2015 732,000 January 5 Retained Earnings Cash Dividends Payable To record declaration of cash dividends [35,000 sh $0.40] 14,000 March 20 Treasury Shares Cash To record purchase of treasury shares [5,000 sh $10] 50,000 April 5 Retained Earnings Cash Dividends Payable To record declaration of cash dividends [(35,000 sh - 5,000 sh ) $0.40] 12,000 July 5 Retained Earnings Cash Dividends Payable To record declaration of cash dividends [(35,000 sh - 5,000 sh ) $0.40] 12,000 July 31 Retained Earnings Share Dividend Distributable Paid in capital in excess of par value To record declaration of share dividends [(35,000 sh - 5,000 sh ) 20% $12] 72,000 August 14 Share Dividend Distributable Common Stock 30,000 October 5 Retained Earnings Cash Dividends Payable To record declaration of cash dividends [(35,000 sh - 5,000 sh + 6,000 sh) $0.40] 14,400 204,400 December 31 Income Summary Page 3 14,000 50,000 12,000 12,000 30,000 42,000 30,000 14,400 204,400 Retained Earnings To record closing of net income to retained earnings Problem 7 Cash dividends per share Multiplied by: Share entitled to dividends on January 10 Cash dividends payable on January 5 US$ Cash dividends per share Multiplied by: Share entitled to dividends on April 10 Cash dividends payable on April 5 US$ Cash dividends per share Multiplied by: Share entitled to dividends on July 10 Cash dividends payable on July 5 US$ Cash dividends per share Multiplied by: Share entitled to dividends on October 10 Cash dividends payable on October 5 US$ Problem 8 Unit share price Multiplied by: Share declared as dividends [30,000 sh 20%] Cash dividends payable on January 5 US$ US$ US$ US$ US$ US$ 0.40 35,000 14,000 0.40 30,000 12,000 0.40 30,000 12,000 0.40 36,000 14,400 12.00 6,000 72,000 Problem 9 Total cost of treasury stock Divided by: Number of treasury stock Average cost of treasury stock US$ US$ Problem 10 Retained Earnings, December 31, 2016 Retained Earnings, 1 January 2016 Cash dividends declared and paid [$14,000 + $12,000 2 + $14,400] Stock dividends declared and distributed Net income for the period 50,000 5,000 10 US$ 400,000 (320,000) 52,400 72,000 US$ 204,400 Problem 11 R1 As given, the current market value (price) of this corporation's common stock is $179. Problem 12 R2 Preferred Stock Divided by: Number of issued shares Par value of preferred stock US$ Common Stock Divided by: Number of issued shares Par value of common stock US$ US$ 95,000 1,000 95 US$ 100,000 4,000 25 US$ 95,000 Problem 13 Preferred Stock Page 4 Divided by: Number of outstanding shares Book value per preferred stock US$ Common Stock Retained Earnings Common Stockholders' Equity Divided by: Number of outstanding shares Book value per common stock US$ US$ US$ 1,000 95.00 100,000 310,000 410,000 4,000 102.50 Problem 14 Preferred Stock Excess of Par [$95,000 5% 2] Preferred Stockholders' Equity Divided by: Number of outstanding shares Book value per preferred stock US$ Common Stock Excess of Par [$310,000 - $95,000 5% 2] Common Stockholders' Equity Divided by: Number of outstanding shares Book value per common stock US$ US$ US$ US$ US$ 95,000 9,500 104,500 1,000 104.50 95,000 300,500 395,500 4,000 98.88 Problem 15 Here, the call price shall be ignored for book value computation. Therefore, the answers in this problem will be the same as those in the previous problem. Hence, the book value per preferred stock is $104.50 and the book per common stock is $98.88. Problem 16 Preferred US$ 9,500 Preferred Stock [$95,000 5% 2] Common Stock [$27,800 - $9,500] Total dividends payable Divided by: Outstanding shares Dividend per share US$ US$ Page 5 Common US$ 9,500 US$ 1,000 9.50 US$ 18,300 18,300 4,000 4.58 Problem 1 Hartford Research issues bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds have a $31,000 par value and an annual contract rate of 12%, and they mature in 10 years. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided. Round all table values to 4 decimal places, and use the rounded table values in calculations.) Required Consider each of the following three separate situations. (R1) The market rate at the date of issuance is 10%. a. Calculate the bond's issue price on 1 January 2015. $31,0001.0520 + $31,0000.06 b. 1 1.0520 = $34,863.29 0.05 Prepare the journal entry to record their issuance. 34,863.29 Cash Premium on Bonds Payable Bonds Payable 3,863.29 31,000.00 (R2) The market rate at the date of issuance is 12%. a. Calculate the bond's issue price on 1 January 2015. $31,0001.0620 + $31,0000.06 1 1.0620 = $31,000 0.06 (R3) The market rate at the date of issuance is 14%. a. Calculate the bond's issue price on 1 January 2015. $31,0001.0720 + $31,0000.06 b. 1 1.0720 = $27,715.86 0.07 Prepare the journal entry to record their issuance. 27,715.86 3,284.14 Cash Discount on Bonds Payable Bonds Payable 31,000.00 Problem 2 Hillside issues $1,300,000 of 7%, 15-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,123,346. (R1) a. Prepare the January 1, 2015, journal entry to record the bonds' issuance. 1,123,346.00 176,654.00 Cash Discount on Bonds Payable Bonds Payable Page 1 1,300,000.00 (R2) a. The semiannual cash payment is calculated as follows. $1,300,0003.5% = $45,500 b. The straight-line discount amortization is calculated as follows. $176,654 / 30 = $5,888.47 c. Bond interest expense is calculated as follows. Semiannual cash payment Straight-line discount amortization Semiannual bond interest expense 45,500.00 5,821.80 51,321.80 Total payments at maturity [$1,300,000 + $45,500 30] Amount borrowed Total bond interest expense 2,665,000 (1,123,346) 1,541,654 (R3) (R4) Semiannual Period-End January 1, 2015 June 30, 2015 December 31, 2015 June 30, 2016 December 31, 2016 Interest Payment Interest Expense 45,500.00 45,500.00 45,500.00 45,500.00 Principal 51,388.47 51,388.47 51,388.47 51,388.47 Carrying Value 5,888.47 5,888.47 5,888.47 5,888.47 1,123,346.00 1,129,234.47 1,135,122.93 1,141,011.40 1,146,899.87 (R5) 30 Jun 2015 31 Dec 2015 Interest Expense Discount on Bonds Payable Cash 51,388.47 Interest Expense Discount on Bonds Payable Cash 51,388.47 5,888.47 45,500.00 5,888.47 45,500.00 Problem 3 Legacy issues $740,000 of 7.5%, four-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $680,186 and their market rate is 10% at the issue date. (R1) Prepare the January 1, 2015, journal entry to record the bonds' issuance. Cash Discount on Bonds Payable Bonds Payable 680,186.00 59,814.00 740,000.00 Problem 4 (R2) Determine the total bond interest expense to be recognized over the bond's life. Total payments at maturity [$740,000 + $740,000 7.5%/2 8] Amount borrowed Total bond interest expense Problem 5 Page 2 962,000 (680,186) 281,814 (R3) Interest Payment Semiannual Period-End January 1, 2015 June 30, 2015 December 31, 2015 June 30, 2016 December 31, 2016 Problem 6 (R4) 30 Jun 2015 31 Dec 2015 Interest Expense 27,750.00 27,750.00 27,750.00 27,750.00 Principal 35,226.75 35,226.75 35,226.75 35,226.75 7,476.75 7,476.75 7,476.75 7,476.75 Interest Expense Discount on Bonds Payable Cash 35,226.75 Interest Expense Discount on Bonds Payable Cash 35,226.75 Carrying Value 680,186.00 687,662.75 695,139.50 702,616.25 710,093.00 7,476.75 27,750.00 7,476.75 27,750.00 Problem 7 On November 1, 2015, Norwood borrows $480,000 cash from a bank by signing a ve-year installment note bearing 5% interest. The note requires equal total payments each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) a. The total amount of each installment payment is calculated as follows. $480,000 b. 1 1.055 = $110,867.90 0.05 Complete an amortization table for this installment note. Periods Beginning Balance Annual Payment Principal Interest 31 Oct 2015 Ending Balance 480,000.00 31 Oct 2016 110,867.90 86,867.90 24,000.00 393,132.10 31 Oct 2017 393,132.10 110,867.90 91,211.30 19,656.60 301,920.80 31 Oct 2018 301,920.80 110,867.90 95,771.86 15,096.04 206,148.94 31 Oct 2019 206,148.94 110,867.90 100,560.46 10,307.45 105,588.48 31 Oct 2020 c. 480,000.00 105,588.48 110,867.90 105,588.48 5,279.42 0.00 Prepare the journal entries in which Norwood records the following: Page 3 4,000.00 December 31, 2015 Interest Expense Interest Payable Problem 7B October 31, 2016 Interest Payable Interest Expense Notes Payable Cash 4,000.00 20,000.00 86,867.90 4,000.00 110,867.90 Problem 8 At the end of the current year, the following information is available for both Pulaski Company and Scott Company. Total assets Total liabilities Total equity Pulaski Company 2,320,500 838,500 1,482,000 Scott Company 1,189,500 532,500 657,000 Compute the debt-to-equity ratios for both companies. Total liabilities Total equity Debt-to-equity ratios Pulaski Company 838,500 1,482,000 0.57 Scott Company 532,500 657,000 0.81 Problem 9 Ike issues $260,000 of 9%, three-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $266,811. Their market rate is 8% at the issue date. (R1) Prepare the January 1, 2015, journal entry to record the bonds' issuance. 266,811.00 Cash Premium on Bonds Payable Bonds Payable 6,811.00 260,000.00 Problem 10 (R2) Determine the total bond interest expense to be recognized over the bonds' life. Page 4 70,200.00 260,000.00 (266,811.00) 63,389.00 Total cash interest payments [$260,000 4.5% 6] Par value at maturity Amount borrowed Total bond interest expense Problem 11 (R3) Prepare an eective interest amortization table for the bond's rst two years. Periods Cash Interest Paid Bond Interest Expense Premium Amortization Unamortized Premium Carrying Value 1 Jan 2015 266,814.78 30 Jun 2015 11,700.00 10,672.59 1,027.41 5,787.37 265,787.37 31 Dec 2015 11,700.00 10,631.49 1,068.51 4,718.86 264,718.86 30 Jun 2016 11,700.00 10,588.75 1,111.25 3,607.62 263,607.62 31 Dec 2016 11,700.00 10,544.30 1,155.70 2,451.92 262,451.92 30 Jun 2017 11,700.00 10,498.08 1,201.92 1,250.00 261,250.00 31 Dec 2017 11,700.00 10,450.00 1,250.00 0.00 260,000.00 Problem 12 (R4) Prepare the journal entries to record the rst two interest payments. 30 Jun 2015 31 Dec 2015 Interest Expense Premium on Bonds Payable Cash 10,672.59 1,027.41 Interest Expense Premium on Bonds Payable Cash 10,631.49 1,068.51 11,700.00 11,700.00 Problem 13 (R5) Prepare the journal entry to record the bonds' retirement on January 1, 2017, at 98. 1 Jan 2017 Bonds Payable Premium on Bonds Payable Gain on Retirement Cash [$260,000 0.98] 260,000.00 2,451.92 7,651.92 254,800.00 Problem 14 Rogers Company signs a ve-year capital lease with Packer Company for oce equipment. The annual year-end lease payment is $24,000, and the interest rate is 7%. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.) (R1) The present value of Roger's ve-year lease payments is calculated as follows. $24,000 1 1.075 = $98,404.74 0.07 Problem 15 (R2) Prepare the journal entry to record Roger's capital lease at its inception. Page 5 98,404.74 Leased Office Equipment Lease Liability 98,404.74 Problem 16 (R3) Complete a lease payment schedule for the ve years of the lease with the following headings. Assume that the beginning balance of the lease liability is the present value of lease payments. Periods Beginning Annual Payment Principal Interest Year 0 Ending Balance 98,404.74 Year 1 98,404.74 24,000.00 17,111.67 6,888.33 81,293.07 Year 2 81,293.07 24,000.00 18,309.49 5,690.51 62,983.59 Year 3 62,983.59 24,000.00 19,591.15 4,408.85 43,392.44 Year 4 43,392.44 24,000.00 20,962.53 3,037.47 22,429.91 Year 5 22,429.91 24,000.00 22,429.91 1,570.09 0.00 Problem 17 (R4) Use straight-line depreciation and prepare the journal entry to depreciate the leased asset at the end of year 1. Assume zero salvage value and a ve-year life for the oce equipment. 19,680.95 Depreciation Expense Accumulated Depreciation Depreciation: $98,404.74 = $19,680.95 5 Page 6 19,680.95 Problem 2 Common stock$15 par value, 100,000 shares authorized, 45,000 shares issued and outstanding 675,000 60,000 Paid-in capital in excess of par value, common stock 370,000 Retained earnings Total stockholders' equity 1,105,000 In year 2016, the following transactions aected its stockholders' equity accounts. Jan. 1 Purchased 5,000 shares of its own stock at $25 cash per share. 5 Directors declared a $4 per share cash dividend payable on Feb. 28 to the Feb. 5 stockholders of record. Feb. 2 Paid the dividend declared on January 5. Jul. 6 Sold 1,875 of its treasury shares at $29 cash per share. Aug. 22 Sold 3,125 of its treasury shares at $22 cash per share. Sept. 5 Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record. Oct. 28 Paid the dividend declared on September 5. Dec. 31 Closed the $408,000 credit balance (from net income) in the Income Summary account to Retained Earnings. January 1 January 5 February 2 July 6 August 22 September 5 Treasury Shares Cash To record purchase of treasury shares 125,000 Retained Earnings Cash Dividends Payable To record declaration of cash dividends [(45,000 sh - 5,000 sh) $4] 160,000 Cash Dividends Payable Cash To record payment of cash dividends 160,000 Cash Share Premium Treasury Shares Treasury Shares To record sale of treasury shares 54,375 Cash Share Premium Treasury Shares Retained Earnings Treasury Shares To record sale of treasury shares 68,750 7,500 1,875 Retained Earnings Cash Dividends Payable To record declaration of cash dividends [45,000 sh $4] 180,000 Page 1 625,000 160,000 160,000 7,500 46,875 78,125 180,000 October 28 180,000 Cash Dividends Payable Cash To record payment of cash dividends 180,000 408,000 December 31 Income Summary Retained Earnings To record closing of net income to retained earnings 408,000 Problem 4 Kohler Corporation Statement of Retained Earnings For the Year Ended December 31, 2016 Retained Earnings, January 1, 2016 Net income for the year Cash dividends declared and paid Loss on sale of treasury shares Retained Earnings, December 31, 2016 US$ 370,000 408,000 (340,000) (1,875) US$ 436,125 Problem 4 Common stock$15 par value, 100,000 shares authorized, 45,000 shares issued and outstanding Paid-in capital in excess of par value, common stock 675,000 60,000 Retained earnings 436,125 1,171,125 Total stockholders' equity Problem 5 Account: Date Common stock, $12 par value Particulars 30 Sep 2016 5 Nov 2016 Beginning Balance Distribution of stock dividends Account: Date 31 Oct 2016 5 Nov 2016 Common stock dividend distributable Particulars Debit Declaration of stock dividends Distribution of stock dividends 40,000 Account: Date Paid-in capital in excess of par value, common stock Particulars Debit Credit 30 Sep 2016 31 Oct 2016 Beginning Balance Declaration of stock dividends Account: Date Retained earnings Particulars 30 Sep 2016 2 Oct 2016 31 Oct 2016 Beginning Balance Declaration of cash dividends Declaration of stock dividends Debit Credit 40,000 Credit 40,000 43,000 Debit 60,000 83,000 Page 2 Credit Balance Debit Credit 420,000 460,000 Balance Debit Credit 40,000 0 Balance Debit Credit 100,000 143,000 Balance Debit Credit 360,000 300,000 217,000 31 Dec 2016 260,000 Net income for the period 477,000 Problem 6 Common stock$5 par value, 50,000 shares authorized, 35,000 shares issued and outstanding 175,000 Paid-in capital in excess of par value, common stock 135,000 Retained earnings 320,000 Total stockholders' equity, December 31, 2015 630,000 Common stock$5 par value, 50,000 shares authorized, 41,000 shares issued and outstanding 205,000 Paid-in capital in excess of par value, common stock 177,000 Retained earnings ($50,000 restricted by treasury stock) 400,000 782,000 Cost of treasury stock (50,000) Total stockholders' equity, December 31, 2015 732,000 January 5 Retained Earnings Cash Dividends Payable To record declaration of cash dividends [35,000 sh $0.40] 14,000 March 20 Treasury Shares Cash To record purchase of treasury shares [5,000 sh $10] 50,000 April 5 Retained Earnings Cash Dividends Payable To record declaration of cash dividends [(35,000 sh - 5,000 sh ) $0.40] 12,000 July 5 Retained Earnings Cash Dividends Payable To record declaration of cash dividends [(35,000 sh - 5,000 sh ) $0.40] 12,000 July 31 Retained Earnings Share Dividend Distributable Paid in capital in excess of par value To record declaration of share dividends [(35,000 sh - 5,000 sh ) 20% $12] 72,000 August 14 Share Dividend Distributable Common Stock 30,000 October 5 Retained Earnings Cash Dividends Payable To record declaration of cash dividends [(35,000 sh - 5,000 sh + 6,000 sh) $0.40] 14,400 204,400 December 31 Income Summary Page 3 14,000 50,000 12,000 12,000 30,000 42,000 30,000 14,400 204,400 Retained Earnings To record closing of net income to retained earnings Problem 7 Cash dividends per share Multiplied by: Share entitled to dividends on January 10 Cash dividends payable on January 5 US$ Cash dividends per share Multiplied by: Share entitled to dividends on April 10 Cash dividends payable on April 5 US$ Cash dividends per share Multiplied by: Share entitled to dividends on July 10 Cash dividends payable on July 5 US$ Cash dividends per share Multiplied by: Share entitled to dividends on October 10 Cash dividends payable on October 5 US$ Problem 8 Unit share price Multiplied by: Share declared as dividends [30,000 sh 20%] Cash dividends payable on January 5 US$ US$ US$ US$ US$ US$ 0.40 35,000 14,000 0.40 30,000 12,000 0.40 30,000 12,000 0.40 36,000 14,400 12.00 6,000 72,000 Problem 9 Total cost of treasury stock Divided by: Number of treasury stock Average cost of treasury stock US$ US$ Problem 10 Retained Earnings, December 31, 2016 Retained Earnings, 1 January 2016 Cash dividends declared and paid [$14,000 + $12,000 2 + $14,400] Stock dividends declared and distributed Net income for the period 50,000 5,000 10 US$ 400,000 (320,000) 52,400 72,000 US$ 204,400 Problem 11 R1 As given, the current market value (price) of this corporation's common stock is $179. Problem 12 R2 Preferred Stock Divided by: Number of issued shares Par value of preferred stock US$ Common Stock Divided by: Number of issued shares Par value of common stock US$ US$ 95,000 1,000 95 US$ 100,000 4,000 25 US$ 95,000 Problem 13 Preferred Stock Page 4 Divided by: Number of outstanding shares Book value per preferred stock US$ Common Stock Retained Earnings Common Stockholders' Equity Divided by: Number of outstanding shares Book value per common stock US$ US$ US$ 1,000 95.00 100,000 310,000 410,000 4,000 102.50 Problem 14 Preferred Stock Excess of Par [$95,000 5% 2] Preferred Stockholders' Equity Divided by: Number of outstanding shares Book value per preferred stock US$ Common Stock Excess of Par [$310,000 - $95,000 5% 2] Common Stockholders' Equity Divided by: Number of outstanding shares Book value per common stock US$ US$ US$ US$ US$ 95,000 9,500 104,500 1,000 104.50 95,000 300,500 395,500 4,000 98.88 Problem 15 Here, the call price shall be ignored for book value computation. Therefore, the answers in this problem will be the same as those in the previous problem. Hence, the book value per preferred stock is $104.50 and the book per common stock is $98.88. Problem 16 Preferred US$ 9,500 Preferred Stock [$95,000 5% 2] Common Stock [$27,800 - $9,500] Total dividends payable Divided by: Outstanding shares Dividend per share US$ US$ Page 5 Common US$ 9,500 US$ 1,000 9.50 US$ 18,300 18,300 4,000 4.58 Question 1 Date Debit Credit Particulars 01-Apr-15 Cash Office Equipment Common Stock 80,000 26,000 106,000 02-Apr-15 Prepaid Rent Cash 9,000 03-Apr-15 Office Equipment Office Supplies Accounts Payable 8,000 3,600 06-Apr-15 Cash Service Revenue 4,000 09-Apr-15 Accounts Receivable Service Revenue 6,000 9,000 11,600 4,000 6,000 13-Apr-15 Accounts Payable Cash 11,600 19-Apr-15 Prepaid Insurance Cash 2,400 22-Apr-15 Cash Accounts Receivable 4,400 25-Apr-15 Accounts Receivable Service Revenue 2,890 28-Apr-15 Dividends Cash 5,500 11,600 2,400 4,400 2,890 5,500 29-Apr-15 Office Supplies Accounts Payable 600 30-Apr-15 Utilities Expense Cash 435 600 435 Adjusting Entries a Rent Expense Prepaid Rent [$9,000/12] 750 b Insurance Expense Prepaid Insurance [$2,400/12] 200 750 200 c Office Supplies Expense Office Supplies [$3,600 + $600 - $1,200] 3,000 3,000 d Depreciation Expense Accumulated Depreciation -- Equipment 500 500 e Accounts Receivable Service Revenue 1,800 f Salaries and Wages Expense Salaries and Wages Payable 2,600 1,800 2,600 General Ledger Account Cash Date 01-Apr-15 02-Apr-15 06-Apr-15 13-Apr-15 19-Apr-15 22-Apr-15 28-Apr-15 Particulars Investment by owner Payment for rent Receipt for services rendered Payment of account Payment for insurance Collection of account Payment for dividends Debit Credit 80,000 9,000 4,000 11,600 2,400 4,400 5,500 Balance Debit 80,000 71,000 75,000 63,400 61,000 65,400 59,900 Credit 30-Apr-15 Payment for utilities 435 59,465 Account Accounts Receivable Date 09-Apr-15 22-Apr-15 25-Apr-15 30-Apr-15 Particulars Billed customer for services rendered Collection of account Billed customer for service rendered Adjustment for billed services Debit Credit 6,000 4,400 2,890 1,800 Balance Debit Credit 6,000 1,600 4,490 6,290 Account Office Supplies Date Particulars 03-Apr-15 Purchase of office supplies on account 29-Apr-15 Purchase of office supplies on account 30-Apr-15 Adjustment for office supplies expense Debit Credit 3,600 600 3,000 Balance Debit Credit 3,600 4,200 1,200 Account Prepaid Rent Date Particulars 02-Apr-15 Payment for rent 30-Apr-15 Adjustment for rent expense Debit Balance Credit 9,000 750 Debit 9,000 8,250 Credit Account Prepaid Insurance Date Particulars 02-Apr-15 Payment for insurance 30-Apr-15 Adjustment for insurance expense Debit Balance Credit 2,400 200 Debit 2,400 2,200 Credit Account Office Equipment Date Particulars 02-Apr-15 Purchase of equipment on account 03-Apr-15 Purchase of equipment on account Debit Balance Credit Debit 26,000 34,000 26,000 8,000 Credit Account Accumulated Depreciation -- Office Equipment Date Particulars Debit Balance Credit 30-Apr-15 Adjustment for depreciation Debit Credit 500 500 Account Accounts Payable Date Particulars 03-Apr-15 Purchase of equipment and supplies on account 13-Apr-15 Payment of account 29-Apr-15 Purchase of office supplies on account Debit Balance Credit Debit Credit 11,600 600 11,600 11,600 600 Account Salaries and Wages Payable Date Particulars Debit 30-Apr-15 Adjustment for salaries and wages Credit Balance Debit Credit 2,600 2,600 Account Common Stock Date Particulars Debit 01-Apr-15 Investment by owner Credit Balance Debit Credit 106,000 106,000 Account Retained Earnings Date Particulars Debit Credit Particulars Debit Credit Balance Debit Credit Account Dividends Date 28-Apr-15 Payment for dividends 5,500 Balance Debit 5,500 Credit Account Service Revenue Date 06-Apr-15 09-Apr-15 25-Apr-15 30-Apr-15 Particulars Debit Receipt from services Billed services Billed services Adjustment for services rendered Credit Balance Debit Credit 4,000 10,000 12,890 14,690 4,000 6,000 2,890 1,800 Account Salaries and Wages Expense Date Particulars 30-Apr-15 Adjustment for accrued salaries Debit Credit 2,600 Balance Debit Credit 2,600 Account Rent Expense Date Particulars Debit Credit Balance Date Particulars Debit 30-Apr-15 Adjustment for rent expense Credit Debit 750 Credit 750 Account Depreciation Expense Date Particulars Debit 30-Apr-15 Adjustment for depreciation Credit Balance Debit 500 Credit 500 Account Office Supplies Expense Date Particulars Debit 30-Apr-15 Adjustment for office supplies expense Credit 3,000 Balance Debit 3,000 Credit Account Insurance Expense Date Particulars Debit 30-Apr-15 Adjustment for insurance expense Credit Balance Debit 200 Credit 200 Account Utilities Expense Date Particulars Debit 30-Apr-15 Payment for utilities Credit 435 Cash Accounts Receivable Office Supplies Prepaid Rent Prepaid Insurance Office Equipment Accumulated Depreciation -- Office Equipment Accounts Payable Salaries and Wages Payable Common Stock Retained Earnings Dividends Service Revenue Salaries and Wages Expense Rent Expense Depreciation Expense Office Supplies Expense Insurance Expense Utilities Expense Totals $ Debit 59,465 6,290 1,200 8,250 2,200 34,000 Credit $ 500 600 2,600 106,000 - 5,500 14,690 2,600 750 500 3,000 200 435 124,390 $ 124,390 $ $ 14,690 LinkWorks Inc. Income Statement For the Month Ended April 30, 2015 Service Revenue Expenses: Salaries and Wages Expense Rent Expense Depreciation Expense Office Supplies Expense Insurance Expense Utilities Expense $ Net Income 2,600 750 500 3,000 200 435 (7,485) $ 7,205 $ 7,205 (5,500) 1,705 LinkWorks Inc. Statement of Retained Earnings For the Month Ended April 30, 2015 Retained Earnings, 1 April 2015 Net Income Cash Dividends Declared and Paid Retained Earnings, 30 April 2015 $ LinkWorks Inc. Credit 435 LinkWorks Inc. Adjusted Trial Balance April 30, 2015 Account Balance Debit Balance Sheet April 30, 2015 Assets Current Assets Cash Accounts Receivable Prepaid Expenses Total Current Assets $ 59,465 6,290 11,650 $ Non Current Assets Property, Plant and Equipment 77,405 33,500 Total Assets $ 110,905 Liabilities and Shareholders' Equity Current Liabilities Trade and Other Payables $ 3,200 Shareholders' Equity Common Stock Retained Earnings Total Shareholders' Equity $ 106,000 1,705 107,705 Total Liabilities and Shareholders' Equity $ 110,905 Impact on Income Income Statement Increase expenses, decrease net income Balance Sheet Decrease assets, decrease equity Insurance Increase expenses, decrease net income Decrease assets, decrease equity Office Supplies Increase expenses, decrease net income Decrease assets, decrease equity Depreciation Increase expenses, decrease net income Decrease assets, decrease equity Unbilled fees Increase revenue, increase net income Increase assets, increase equity Unpaid wages Increase expenses, decrease net income Increase liability, decrease equity Adjusting entry related to: Rent BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2016 Computer services revenue Net sales Total revenue $ Cost of goods sold Depreciation expenseOffice equipment Depreciation expenseComputer equipment Wages expense Insurance expense Rent expense Computer supplies expense Advertising expense Mileage expense Repairs expenseComputer Total expenses $ Net income Question 2 25,007 17,793 $ 42,800 14,252 380 1,220 2,550 475 1,675 1,285 590 300 890 (23,617) $ 19,183 BUSINESS SOLUTIONS Comparative Balance Sheets December 31, 2015, and March 31, 2016 31-Mar-16 Assets Cash Accounts receivable Inventory Computer supplies Prepaid insurance Prepaid rent Total current assets Office equipment Accumulated depreciationOffice equipment Computer equipment Accumulated depreciationComputer equipment Total assets Liabilities and Equity Accounts payable Wages payable Unearned computer service revenue Total current liabilities Equity Common stock Retained earnings Total liabilities and equity $ 31-Dec-15 83,727 $ 24,267 644 2,025 1,090 785 112,538 $ 7,400 (760) 19,700 (2,440) 136,438 $ 56,832 5,268 0 530 1,595 785 65,010 7,400 (380) 19,700 (1,220) 90,510 $ $ 895 0 895 $ 1,170 580 2,000 3,750 $ 113,000 22,543 136,438 $ 79,000 7,760 90,510 $ $ $ BUSINESS SOLUTIONS Statement of Cash Flows For the Quarter Ended March 31, 2016 Cash Flows from Operating Activities Net Income Adjustments for: Depreciation expenseOffice equipment Depreciation expenseComputer equipment Increase in Accounts Receivable Increase in Inventory Increase in Computer Supplies Decrease in Prepaid Insurance Decrease in Accounts Payable Increase in Wages Payable Decrease in Unearned Computer Service Revenue Net Cash Flows Used in Operating Activities $ $ $ 19,183 (21,888) (2,705) 380 1,220 (18,999) (644) (1,495) 505 (1,170) 315 (2,000) Cash Flows from Investment Activities Cash Flows from Financing Activities Cash receipt from additional investment by the owner Cash payment for dividends Net Cash Flows Provided by Financing Activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents, 31 December 2015 Cash and Cash Equivalents, 31 March 2016 - $ 34,000 (4,400) 29,600 $ $ 26,895 56,832 83,727 26,895 18,999 644 1,495 505 - Increase Increase Increase Increase Decrease 380 Increase 1,220 Increase 1,170 Decrease 315 Increase 2,000 Decrease 34,000 14,783