Please find enclosed my accounting homework for Chapter 11 and 12. I have answered each question but just need a tutor to double check each answer and correct any errors I may have made. Thank you.

11-1 The balance sheet as of December 31, 2011 for Melrose Enterprises follows: ASSSETS Current Non Current assets 200,000 700,000 Total assets LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities 200,000 Long term Liabilities 300,000 Shareholder's Equity 400,000 Total 900,000 900,000 During 2011 Melrose entered into a loan agreement that required the company to maintain a debt/equity ratio of less than 2:1. a. How much additional debt can Melrose take on before it violates the terms of the loan agreement So it could take on an additional $300,000 b. Assume that during 2012 Melrose had revenues of $950,000 and expenses of $800,000. Assume that all revenues and expenes were cash. How much additional debt can Melrose take on before it violates the terms of the loan agreement. So Current Liabilities $200,000+$600,000=now $800,000 ? (Expenses) So Current Shareholder's Equity $400,000+$550,000=$950,000 ? (Revenue) So $800,000+$300,000/$950,000=1.15 ?? c. Assume again that during 2012 Melrose has cash revenues of $950,000 and cash expenses of $800,000. If Melrose pays a cash dividends of $100,000, how much additional debt can it take on before violating the terms of the loan agreement. If Melrose declares, but does not pay, the dividend during 2012, does it make a difference in the amount of additional debt the company can take on? So it could take on an additional $500,000?? No it does not make a difference if Melrose declares, but does not pay, the dividend during 2012. ?? 11-2 Hathaway Manufacturing issued long-term debt on January 1, 2011. The debt has a face value of $300,000 and an annual stated interest rate of 10 percent. The debt matures on January 1, 2016. a. Assume that the debt agreement requires Hathaway Manufacturing to make annual interest payments every January 1. Setup a timeline that indicates the timing and magnitude of the future cash outflows of this long-term debt. Face Value=$300,000 Annual Interest=$30,000 Issuance Date-1/1/11 Issued at-$300,000 (Face Value) >1 Year ($30,000) >2Years ($30,000) >3Years ($30,000) >4Years....... ($30,000) Maturity Date 1/1/16 > 16Years Interest & FV ($30,000) $300,000 Did I do this correctly???? b. Assume that the debt agreement requires Hathaway Manurfacturing to make semiannual interest payments every July 1 and Jan 1. Setup a timeline that indicates the timing and magnitude of the future cash outflows for this long-term debt. Face Value=$300,000 Annual Interest=(300,000x 10%)/2=$15,000 Issuance Date-1/1/11 Issued at-$300,000 (Face Value) Did I do this correctly?? >6 months ($15,000) > 1Year ($15,000) >6 months ($15,000) >2Years....... ($15,000) Maturity Date 1/1/16 > 16Years Interest & FV ($15,000) $300,000 12-1 The following are possible transactions that affect shareholder's equity. For each of the possible transactions indicate the following: The accounts within Shareholder's equity section that would be affected Whether these The effect (increase, accounts decrease, or no would be effect) of the increased transaction on total or shareholders' decreased equity 1. A company issues common stock above par value for cash. Common stock Increased 2. A company declares a 3-for-1 stock split. Retained earnings Increased 3. A company repurchases 10,000 shares of its own common stock in exchange for cash. Treasury Stock Decreased Decrease 4. A company declares and issues a stock dividend. Assume that the fair market value of the stock is greater than the par value. Additional paid in capital Increased Increased 5. A company reissues 1,000 shares of treasury stock for $75 per share. The stock was acquired for $60 per share. Treasury Stock Decreased Decrease 6. A company pays a cash dividend that had been declared fifteen days earlier Preferrd Common stock Increased Increase 7. A company gernerates net income $250,000. Retained earnings No Effect Increased Increase No Effect 12-2 ASSETS Current Assets Noncurrent Assets 85,000 315,000 Total Assets 400,000 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities 52,000 Long term note payable 35,000 Preferred Stock 50,000 Common Stock 80,000 Additional paid-in capital Preferred Stock 50,000 Common Stock 100,000 Retained Earnings 113,000 Less: Treasury stock -80,000 Total liabilities and shareholder's equity $400,000 a. What portions of Lamont's assets were provided by debt, contributed capital, and earned capital? Reduce contributed capital by the cost of the treasury stock. Debt= Current Liabilities ($52,000) + Lt Note Payable ($35,000)=$87,000 ?? Contributed Capital= Preferred Stock (50,000) + Common Stock (80,000) + Adtnl Paid in Capital (50,000+100,000)= 280,000? Earned Capital= Retained Earnings (113,000) - Treasury Stock (80,000)= 33,000? b. Compute the company's debt/equity ratio. Compute the debt/equity ratio if the preferred stock issuance was classified as long term debt. DEBT/EQUITY RATIO 87,000/280,000? DEBT/EQUITY IF PREFERRED STOCK ISSUANCE CLASSIFIED AS LONG TERM DEBT??? How would you calculate this?? c. In most states, to what dollar amount of dividends would the company be limited? 1,000,000,000? 12-3 Deming Contractors was involved in the following events involving stocks during 2012: Prepare entries, if appropriate, for each event, describe how each event affects the basic accounting equation and explain the economic significance of par value. 1. Authorized to issue: (a) 100,000 shares of $100 par value, 8 percent preferred stock; (b) 150,000 shares of no-par, $5 preferred stock; and (c ) 250,000 shares of $5 par value, common stock Just authorized to issue so I do not think there would be any journal entry needed?? 2. Issued 10,000 shares of $5 par value common stock for $30 per share Cash (+A) 300,000 Common Stock (+CC) Additional Paid-in Capital, C/S (+CC) issued common stock 50,000 250,000 Explain the affects on the basic accounting equation: It would decrease retained earnings??? Economic significance of par value??? 3. Issued 25,000 shares of $100 par value preferred stock for $150 per share Cash (+A) 3,750,000 Preferred Stock (+CC) Additional Paid-in Capital, C/S (+CC) issued preferred stock 2,500,000 1,250,000 Explain the affects on the basic accounting equation: It would decrease retained earnings??? Economic significance of par value??? 4. Issued 50,000 shares of no-par value preferred stock for $50 each. Cash (+A) 2,500,000 Preferred Stock (+CC) 2,500,000 issued preferred stock (50,000 shares x $50/sh.) Explain the affects on the basic accounting equation: It would decrease retained earnings??? Economic significance of par value