Part 1 Instructions Record the following journal entries for ABC Corporation on the journal in the provided Student Input Form (Excel file). Use the letter for each as the date. Journal Entries A. Issued 1000 shares of $10 par common stock at $11, receiving cash. (6 points) B. Issued $ 20000 of 10 year 10% bonds at a market (effective) interest rate of 9%, with interest payable semiannually. (6 points) Use the Dollar and Annuity 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 record, 3200 shares of common stock were outstanding (3 points) D. Paid cash dividend from (C) above. (2 points) E. Purchased 1200 shares of Jones Company for $10 per share, plus $600 commission. The investment is classified as a trading investment. (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 3200 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. Purchased 60 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 $120 from Jones Company (3 points) L. Received a $200 dividend from our investment in Masco Company stock. This investment is treated as an equity method investment. (3 points) M. Sold, at $17 per share, 30 shares of treasury common stock purchased in (F), (6 points) N. Sold 240 shares of Jones company stock purchased in (E) for $13 per share, including commission (6 points) O. Masco Company's total earnings are $10000. We own 40%. Record the earnings for our company using the equity method. 13 points) J. Received semiannual interest from bonds purchased in (H). 13 points) K. Received a total cash dividend of $120 from Jones Company (3 points) (3 points) L. Received a $200 dividend from our investment in Masco Company stock This investment is treated as an equity method investment. M. Sold, at $17 per share, 30 shares of treasury common stock purchased in (F). N. Sold 240 shares of Jones company stock purchased in (E) for $13 per share, including commission (6 points) (6 points) (3 points) O Masco Company's total earnings are $10000. We own 40%. Record the earnings for our company using the equity method. P. Sold the bonds purchased in (H) at 103 plus $63 in accrued interest. Q. The fair value for Jones Company stock increased $2.00 per share during the year. The investment is adjusted to fair value, using a valuation allowance account. (8 points) (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 deterynined using the straight-line method. Round all calculations to the nearest dollar (6 points) Part 2 Instructions: Page 2 After all of the transactions for the year ended December 31, 20x1 have been posted (including the transactions recorded in part 1), the data below is given for the December 31 balances, unless otherwise stated 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. Use the Student Input Form (Excel File) to complete the Financials. Credit Debit 60,000 39,000 Cash Accounts receivable Allowance for doubtful accounts Equity Investments at Cost 2,000 10,000 2,000 10,000 1,000 4,000 600 400 3,000 61,000 30,000 17,780 2,000 20,000 1,000 45,210 2,200 1000 22,000 Allowance for doubtful accounts Equity Investments at Cost Less Valuation Allowance Merchandise inventory at lower of cost (FIFO) or market Prepaid expenses Interest receivable Investment in Masco Company stock Store buildings and equipment Accumulated depreciation-store buildings and equipment Accounts payable Income tax payable Bonds payable, 10%, due in 10 years Premium on bonds payable Retained earnings, January 1, 20X1 Cash dividends. December 31, 20X1 balance Stock Dividends, December 31, 20X1 balance Common stock, $10 par (100,000 shares authorized; 2200 shares outstanding), January 1, 20X1 Paid-in capital in excess of par-common stock, January 1, 20X1 Paid-in capital from sale di treasury stock, January 1, 20X1 Treasury stock, January 1, 20X1 Sales Gain from sale of investment Unrealized gain(loss) on Trading Investments Dividend revenue Interest revenue Income from Masco Co. investments Cost of goods sold Advertising expense Depreciation expense-store buildings and equipment Miscellaneous selling expenses Sales commissions Office rent expense Office salaries expense Miscellaneous administrative expenses Interest expense Income tax expense 2,200 0 0 140,000 200 1.920 160 540 4,000 80,000 $2,000 1,400 1,000 4,000 10,000 12,000 200 1,000 8,000 2 - 8 points each (75 points) 1,100 1,000 100 B 0 Cut 20,000 800 800 1 12 C 13 24 D 15 16 E 800 800 12,600 17 12,600 18 F 4,000 Journal Entries cash common stock paid in capital in excess of common stock cash preimium on bonds payable bonds payable dividends dividends payable: common dividends payable: common cash trading investments cash stock dividends common stock dividends distrutable paid in capital in excess of common stock common stock dividends distrutable common stock bond investments cash treasury stock cash cash interest revenue cash dividend revenue cash investment in masco company cash 19 1,600 2,400 20 21 G 1,600 22 1,600 23 H 5,000 24 251 5,000 720 720 26 27 J 125 28 125 29 K 120 30 120 31 L 200 32 33 M 200 510 Journal & Income Statement Form Statement of SHE Form Balance Sheet Form + Ready Pag ABC Corporation, Inc. Income Statement For the Year Ended December 31, 20X1 (27 points) Cut 4 5 6 7 8 9 00 01 02 STATEMENT OF STOCKHOLDERS' EQUITY AND BALANCE SHEET FORMS ON NEXT TABS BELOW Journal & Income Statement Form Statement of SHE Form Balance Sheet Form Ready esc F G Page 6 A D ABC Corporation, Inc. Statement of Stockholders' Equity For the Year Ended December 31, 20X1 (12 points) Common Stock Paid-In Capital in Pald-in Capital Excess of Par from sale of Common Stock Treasury Stock Treasury Stock Total Retained Earnings 0 0 1 Balances, January 1 6 Issued common stock 2. Net income 3 Cash dividends 9 Stock dividends Sale of treasury stock 11 Purchase of treasruy stock 12 Balances December 31 13 14 15 16 17 18 10 20 23 22 Page 7 1 1 5 4 ABC Corporation, Inc. Balance sheet December 31, 20X1 (36 points) An 2 11 12 1 15 17 1 19 20 22 ON 20 25 26 Llabilities TE 30 31 11 Stockholders' Equity Journal & Income Statement Form Statement of SHE Form Ready