On January 1, 2018, the general ledger of Grand Finale Fireworks includes the following account balances Accounts Debit Credit Cash $ 43,500 Accounts Receivable 46,100 Supplies 8,300 Equipment 72,000 Accumulated Depreciation $ 9,800 Accounts Payable 15,400 Common Stock, $1 par value 18,000 Additional Paid in Capital 88,000 Retained Earnings 38,700 Totals $ 169,900 $ 169,900 During January 2018, the following transactions occur January 2 Issue an additional 2,000 shares of $1 par value common stock for $40,000 January 9 Provide services to customers on account, $16,800 January 10 Purchase additional supplies on account, $5,700 January 12 Repurchase 1,100 shares of treasury stock for $21 per share January 15 Pay cash on accounts payable, $17,300 January 21 Provide services to customers for cash, $49,900 January 22 Receive cash on accounts receivable, $17,400 January 29 Declare a cash dividend of $0 30 per share to all shares outstanding on January 29 The dividend is payable on February 15 (Hint Grand Finale Fireworks had 18,000 shares outstanding on January 1, 2018 and dividends are not paid on treasury stock ) January 30 Reissue 900 shares of treasury stock for $23 per share January 31 Pay cash for salaries during January, $42,800 The following information is available on January 31, 2018 Unpaid utilities for the month of January are $7,000 Supplies at the end of January total $5,900 Depreciation on the equipment for the month of January is calculated using the straight line method At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $10,800 Accrued income taxes at the end of January are $2,800 1 Prepare the closing journal entries for revenue, expenses, and dividends 2 Prepare the income statement and balance sheet 3 And complete the analysis below Analyze the following for Grand Finale Fireworks (a) Calculate the return on equity for the month of January If the average return on equity for the industry for January is 2 50 , is the company more or less profitable than other companies in the same industry The return on equity is Is the company more or less profitable than other companies (b) How many shares of common stock are outstanding as of January 31, 2018 The number of common shares outstanding as of January 31, 2018 is (c) Calculate earnings per share for the month of January (Hint To calculate average shares of common stock outstanding take the beginning shares outstanding plus the ending shares outstanding and divide the total by 2 ) If earnings per share was $2 40 last year (i e , an average of $0 20 per month), is earnings per share for January 2018 better or worse than last years average Earnings per share is Is earnings per share for January 2018 better or worse than last years average

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Posted on Sep 13, 2024

On January 1, 2018, the general ledger of Grand Finale Fireworks includes the following account balances:

During January 2018, the following transactions occur:

January 2	Issue an additional 2,000 shares of $1 par value common stock for $40,000.
January 9	Provide services to customers on account, $16,800.
January 10	Purchase additional supplies on account, $5,700.
January 12	Repurchase 1,100 shares of treasury stock for $21 per share.
January 15	Pay cash on accounts payable, $17,300.
January 21	Provide services to customers for cash, $49,900.
January 22	Receive cash on accounts receivable, $17,400.
January 29	Declare a cash dividend of $0.30 per share to all shares outstanding on January 29. The dividend is payable on February 15.
	(Hint: Grand Finale Fireworks had 18,000 shares outstanding on January 1, 2018 and dividends are not paid on treasury stock.)
January 30	Reissue 900 shares of treasury stock for $23 per share.
January 31	Pay cash for salaries during January, $42,800.

The following information is available on January 31, 2018.

Unpaid utilities for the month of January are $7,000.
Supplies at the end of January total $5,900.
Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $10,800.
Accrued income taxes at the end of January are $2,800.

1. Prepare the closing journal entries for revenue, expenses, and dividends.

2. Prepare the income statement and balance sheet.

3. And complete the analysis below:

Analyze the following for Grand Finale Fireworks:
(a) Calculate the return on equity for the month of January. If the average return on equity for the industry for January is 2.50%, is the company more or less profitable than other companies in the same industry?

The return on equity is:		%

Is the company more or less profitable than other companies?

(b) How many shares of common stock are outstanding as of January 31, 2018?

The number of common shares outstanding as of January 31, 2018 is

(c) Calculate earnings per share for the month of January. (Hint: To calculate average shares of common stock outstanding take the beginning shares outstanding plus the ending shares outstanding and divide the total by 2.) If earnings per share was $2.40 last year (i.e., an average of $0.20 per month), is earnings per share for January 2018 better or worse than last years average?

Earnings per share is:

Is earnings per share for January 2018 better or worse than last years average?