On January 1, 2021, the general ledger of Grand Finale Fireworks includes the following account balances: Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Common Stock, $1 par value Additional Paid-in Capital Retained Earnings Totals Debit Credit $ 44,400 47,900 9,200 81,000 $ 10,700 16,300 17,000 97,000 41,500 $182,500 $182,500 During January 2021, the following transactions occur: January 2 Issue an additional 2,100 shares of $1 par value common stock for $42,000. January 9 Provide services to customers on account, $19,300. January 10 Purchase additional supplies on account, $6,600. January 12 Purchase 1,200 shares of treasury stock for $20 per share. January 15 Pay cash on accounts payable, $18,200. January 21 Provide services to customers for cash, $50,800. January 22 Receive cash on accounts receivable, $18,300. January 29 Declare a cash dividend of $0.20 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hint: Grand Finale Fireworks had 17,000 shares outstanding on January 1, 2021, and dividends are not paid on treasury stock.) January 30 Resell 500 shares of treasury stock for $22 per share. January 31 Pay cash for salaries during January, $43,700. 1. Record each of the transactions listed above. (If no entry is required for a transaction/event, select "No journal entry required" ir the first account field.) View transaction list View journal entry worksheet Debit Credit No 1 Date January 02 42,000 General Journal Cash Common Stock Additional Paid-in Capital 2,100 39,900 N January 09 19,300 Accounts Receivable Service Revenue 19,300 3 January 10 6,600 Supplies Accounts Payable 6,600 4 January 12 24,000 Treasury Stock Cash 24,000 5 January 15 18,200 Accounts Payable Cash 18,200 6 January 21 50,800 Cash Service Revenue 50,800 7 January 22 18,300 Cash Accounts Receivable 18,300 8 January 29 Dividends Dividends Payable a. Unpaid utilities for the month of January are $7,900. b. Supplies at the end of January total $6,800. c. 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 $11,700. d. Accrued income taxes at the end of January are $2,800. 2. Record the adjusting entries on January 31, 2021 for the above transactions. (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 Unpaid utilities for the month of January are $7,900. Prepare the adjusting entry for utilities. Note: Enter debits before credits. Date General Journal Debit Credit January 31 Record entry Clear entry View general journal 3. Prepare an adjusted trial balance as of January 31, 2021. GRAND FINALE FIREWORKS Adjusted Trial Balance January 31, 2021 Debit Accounts Credit Totals $ CA 0 $ 0 4. Prepare an income statement for the period ended January 31, 2021. GRAND FINALE FIREWORKS Income Statement For the month ended January 31, 2021 Revenues Expenses: Income Before Taxes 0 0 5. Prepare a classified balance sheet as of January 31, 2021. (Amounts to be deducted should be indicated by a minus sign.) GRAND FINALE FIREWORKS Classified Balance Sheet January 31, 2021 Assets Liabilities 0 Total Current Liabilities Stockholders' Equity Total Current Assets 0 0 Total Stockholders' Equity Total Liabilities and Stockholders' Equity Total Assets $ CA 0 0 6. Record closing entries. (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 Record the closing entry for revenue accounts. Note: Enter debits before credits. General Journal Debit Credit Date January 31. 2021 Record entry Clear entry View general journal 7. Analyze the following for Grand Finale Fireworks: a-1. Calculate the return on equity for the month of January. Return on Equity Ratio Choose Denominator Choose Numerator Return on Equity Ratio Return on equity II 11 b. How many shares of common stock are outstanding as of January 31, 2021? Number of common stock outstanding C-1. 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.) Earnings Per Share Choose Numerator Choose Denominator = Earnings Per Share Earnings Per Share = =
