On January 1, 2021, the general ledger of Grand Finale Fireworks includes the following account balances:
During January 2021, the following transactions occur:
January | | 2 | | Issue an additional 2,200 shares of $1 par value common stock for $44,000. |
January | | 9 | | Provide services to customers on account, $15,100. |
January | | 10 | | Purchase additional supplies on account, $5,200. |
January | | 12 | | Purchase 1,100 shares of treasury stock for $18 per share. |
January | | 15 | | Pay cash on accounts payable, $16,800. |
January | | 21 | | Provide services to customers for cash, $49,400. |
January | | 22 | | Receive cash on accounts receivable, $16,900. |
January | | 29 | | Declare a cash dividend of $0.40 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hint: Grand Finale Fireworks had 13,000 shares outstanding on January 1, 2021, and dividends are not paid on treasury stock.) |
January | | 30 | | Resell 900 shares of treasury stock for $20 per share. |
January | | 31 | | Pay cash for salaries during January, $42,300. |
The following information is available on January 31, 2021.
- Unpaid utilities for the month of January are $6,500.
- Supplies at the end of January total $5,400.
- Depreciation on the equipment for the month of January is calculated using the straightline method. At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $10,300.
- Accrued income taxes at the end of January are $2,300
Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Common Stock, $1 par value Additional Paid-in Capital Retained Earnings Totals Debit Credit $ 43,000 45, 100 7,800 67,000 $ 9,300 14,900 13,000 83,000 42,700 $162,900 $162,900 Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis 1. Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1 - 10) assuming a FIFO perpetual inventory system. Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances. 2. Record adjusting entries on January 31. in the 'General Journal' tab (these are shown as items 11-14). 3. Review the adjusted 'Trial Balance' as of January 31, 2021, in the 'Trial Balance' tab. 4. Prepare a multiple-step income statement for the period ended January 31, 2021, in the 'Income statement' tab. 5. Prepare a classified balance sheet as of January 31, 2021, in the 'Balance Sheet' tab. 6. Record the closing entries in the 'General Journal' tab these are shown as items 15-17). 7. Using the information from the requirements above, complete the 'Analysis' tab. Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Analysis If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 ..... 17 Record issuance of an additional 2,200 shares of $1 par value common stock for $44,000. Note: Enter debits before credits. Account Title Debit Credit Date Jan 02 Record entry Clear entry View general journal Requirement General ledger > Unadjusted General Ledger Account Cash Accounts Receivable No. Debit Credit No. Date Debit Credit Date Dec 31 Balance 43,000 Balance 45,100 Supplies Equipment No. Debit Credit No. Debit Credit Date Dec 31 Balance 7,800 Date Dec 31 Balance 67,000 Accumulated Depreciation Accounts Payable No. Date / Debit Credit No. Date Debit Debit Credit Balance 9,300 Balance 14,900 Common Stock Additional Paid-in Capital Debit Credit No. Date Debit Credit Balance No. Date Balance 83,000 13,000 Retained Earnings No. Date Debit Credit Balance 42,700 General Journal Trial Balance > Notice the dropdown below that gives the options to select the unadjusted, adjusted or post-closing trial balance. The option you choose will be the values used to populate the income statement and balance sheet tabs. Unadjusted Grand Finale Fireworks Trial Balance January 31, 2021 Account Title Credit $ Debit 43,000 45, 100 7,800 67,000 Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Common Stock Additional Paid-in Capital Retained Earnings Total 9,300 14,900 13,000 83,000 42,700 162,900 162,900 $ Unadjusted Grand Finale Fireworks Multiple-Step Income Statement For the Month ended January 31, 2021 Total Revenue Total Operating Expenses Unadjusted Grand Finale Fireworks Classified Balance Sheet January 31, 2021 Assets Liabilities Current Assets: Current Liabilities: Total Current Assets Noncurrent Assets: Total Current Liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities & Stockholders' Equity Total Assets Lillel your leur11 01 Lyuicy Vui LU UN UCU piule unu cunys pel Suivuu LU 2 Ueliu Piuces. 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 2.60%, 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, 2021? The number of common shares outstanding as of January 31, 2021 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 2021 better or worse than last year's average? Earnings per share is: Is earnings per share for January 2021 better or worse than last year's average