The Castalia Company is a retail company that began operations on October 1, 2018,when it incorporated in the state of North Carolina. The Castalia Company is authorized to issue 300,000 shares of $1 par value common stock and 85, 000 shares of 8%, $ 40 par value preferred stock. The company sells a product that includes a one-year warranty and records estimated warranty payable each month. Customers are charged a 7% state sales tax. The company uses a perpetual inventory system. There are three employees that are paid a monthly salary on the last day of the month.

Requirements 1. In preparation for recording the transactions, prepare a. An amortization schedule for the first 3 months of the mortgage payable issued on October 1. Round interest calculations to the nearest dollar b. Payroll registers for October, November, and December. All employees worked October 1 through December 31 and are subject to the following FICA taxes: OASDI 6.2% on first $118,500 earned: Medicare: 1.45% up to $200,000, 2.35% on earnings above $200,000 Additional payroll information includes to Monthly Health ly Federal Employee Salary Income Tax Insurance $ 6,200 S Karla Jensen 1,860 $ 250 250 Madge Swanson 4,600 920 3,200 250 Sheila Medina 480 c. Calculations for employer payroll taxes liabilities for October, November, and December: OASDI: 6.2% on first $118,500 earned: Medicare: 1.45%; SUTA 5.4% on first $7,000 earned: FUTA: 0.6% on first $7,000 earned 2. Record the transactions in the general journal. Omit explanations 3. Post to the general ledger. 4. Record adjusting entries for the three month period ended December 31, 2018 Depreciation on the Building, straight-line, 40 years, no residual value a. b. Depreciation on Store Fixtures, straight-line, 20 years, no residual value Accrued interest expense on the note payable for the store fixtures c. d. Accrued interest expense on the mortgage payable Print Done 2. Record the transactions in the general journal. Omit explanations 3. Post to the general ledger 4. Record adjusting entries for the three month period ended December 31, 2018 a. Depreciation on the Building, straight-line, 40 years, no residual value b. Depreciation on Store Fixtures, straight-line, 20 years, no residual value Accrued interest expense on the note payable for the store fixtures c. d. Accrued interest expense on the mortgage payable e. Accrued inc ome tax expense of $38,000 5. Post adjusting entries and prepare an adjusted trial balance 6. Prepare a multi-step income statement and statement of retained earnings for the quarter ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. Assume that $12,858 of the mortgage payable is due within the next year. 7. Evaluate the company's success for the first quarter of operations by calculating the following ratios. The market price of the common stock is $40 on December 31, 2018. Round to two decimal places a. Times interest earned b. Debt to equity c. Ea rnings per share d. Price/earnings ratio e. Rate of return on common stock 8. The Castalia Company wants to expand and is considering options for raising additional cash The company estimates net income before the expansion of $260,000 in 2019 and that the expansion will provide additional operating income of $74,000 in 2019. The company intends to sell the shares nf treasury stock souse issued shares for the analysis rather than curre b. Depreciation on Store Fixtures, straight-line, 20 years, no residual value Accrued interest expense on the note payable for the store fixtures c. d. Accrued interest expense on the mortgage payable Accrued income tax expense of $38,000 e. 5. Post adjusting entries and prepare an adjusted trial balance 6. Prepare a multi-step income statement and statement of retained earnings for the quarter ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. Assume that $12,858 of the mortgage payable is due within the next year. 7. Evaluate the company's success for the first quarter of operations by calculating the following ratios. The market price of the common stock is $40 on December 31, 2018. Round to two decimal places a. Times interest earned b. Debt to equity c. Earnings per share d. Price/earnings ratio e. Rate of return on common stock 8. The Castalia Company wants to expand and is considering options for raising additional cash The company estimates net income before the expansion of $260,000 in 2019 and that the expansion will provide additional operating income of $74,000 in 2019. The company intends to sell the shares of treasury stock, so use issued shares for the analysis rather than current shares outstanding. Compare these options, assuming a 30% income tax rate Plan 1: Issue 7,000 additional shares of common stock for $48 per share Plan 2: Issue $240,000 in 10-year, 8% bonds payable Which option will contribute more net income in 2019? Which option provides the highest EPS? Comp13-1 (similar to) Question Help * The Castalia Company is a retail company that began operations on October 1, 2013, when it incorporated in the state of North Carolina. The Castalia Company is authorized to issue 300,000 shares of $1 par value common stock and 35,000 shares of B% $40 par value preferred stock. The company sells a product that includes a one-year waranty and records estimated warranty payable each month Customers are charged a 7% state sales tax The company uses a perpetual inventory system There are three employees that are paid a monthly salary on the last day of the month Following is the chat of accounts for The Castalia Company. As a new business, all beginning balances are 50 Click the con to ew the chart of accounts. The Castalia Company completed the following transactions during the last quarter of 2013, its first year of operations (Click the icon to view the transactions Read the fequirememts Requirement 1a. In preparation for recording the transactions, prepare: An amortization schedule for the first 3 months of the mortgaga payable issued on October 1. Round interast calculations to the nearest dollar Total Beginning Principal Interest Payment Balance 10V01/2018 111/2018 12/1/2018 01/01/2019 Enter any number in the edit felds and then click Check Answer 64 Penaining Clear All Check Answer The Tusquittee Company Chart of Accounts Cash Dividends Payable-Common Merchandise Inventory Notes Payable Land Mortgages Payable Building Common Stock-$1 Par Value Store Fixtures Paid-in Capital in Excess of Par-Common Accumulated Depreciation Paid-in Capita from Treasury Stock Transactions Accounts Payable Retained Earnings Treasury Stock-Commorn Employee Income Taxes Payable FICA-OASDI Taxes Payable Cash Dividends FICA-Medicare Taxes Payable Sales Revenue Employee Health Insurance Payable Cost of Goods Sold Federal Unemployment Taxes Payable Salaries Expense State Unemployment Taxes Payable Payroll Tax Expense Income Tax Payable Utilities Expense Sales Tax Payable Depreciation Expense Estimated Warranty Payable Warranty Expense Homework: Comprehensive Problem #3 Save Score: 0 of 100 pts HW Score: 0%, 0 of 100 pts 1 of 1 (0 complete) Question Help Comp13-1 (similar to) The Castalia Company is a retail company that began operations on October 1 Following is the chart of accounts for The Castalia Company. As a new business, 2018, when it incorporated in the state of North Carolina. The Castalia Company all beginning balances are S0. is authorized to issue 300,000 shares of $1 par value common stock and 85,000 shares of 8%, $40 par value preferred stock. The company sells a product that includes a one-year warranty and records estimated warranty payable each month. Customers are charged a 7% state sales tax. The company uses a perpetual inventory system. There are three employees that are paid a monthlyC salary on the last day of the month EEB (Click the icon to view the chart of accounts.) The Castalia Company completed the following transactions during the last quarter of 2018, its first year of operations: Click the icon to view the transactions) Read the requirements. Requirement 1a. In preparation for recording the transactions, prepare: An amortization schedule for the first 3 months of the mortgage payable issued on October 1. Round interest calculations to the nearest dollar Total Ending Beginning Principal Balance Payment Expense Payment Balance 300,000.00 10/01/2018 1000 300,000.00 2750 3750 299,000.00 11/1/2018 2740.83 299,000.00 3750297,990.83 1009,17 2/1/2018 297,990.83 1018.42 2731.58 3750396,972.41 01/01/2019 Requirements 1. In preparation for recording the transactions, prepare a. An amortization schedule for the first 3 months of the mortgage payable issued on October 1. Round interest calculations to the nearest dollar b. Payroll registers for October, November, and December. All employees worked October 1 through December 31 and are subject to the following FICA taxes: OASDI 6.2% on first $118,500 earned: Medicare: 1.45% up to $200,000, 2.35% on earnings above $200,000 Additional payroll information includes to Monthly Health ly Federal Employee Salary Income Tax Insurance $ 6,200 S Karla Jensen 1,860 $ 250 250 Madge Swanson 4,600 920 3,200 250 Sheila Medina 480 c. Calculations for employer payroll taxes liabilities for October, November, and December: OASDI: 6.2% on first $118,500 earned: Medicare: 1.45%; SUTA 5.4% on first $7,000 earned: FUTA: 0.6% on first $7,000 earned 2. Record the transactions in the general journal. Omit explanations 3. Post to the general ledger. 4. Record adjusting entries for the three month period ended December 31, 2018 Depreciation on the Building, straight-line, 40 years, no residual value a. b. Depreciation on Store Fixtures, straight-line, 20 years, no residual value Accrued interest expense on the note payable for the store fixtures c. d. Accrued interest expense on the mortgage payable Print Done 2. Record the transactions in the general journal. Omit explanations 3. Post to the general ledger 4. Record adjusting entries for the three month period ended December 31, 2018 a. Depreciation on the Building, straight-line, 40 years, no residual value b. Depreciation on Store Fixtures, straight-line, 20 years, no residual value Accrued interest expense on the note payable for the store fixtures c. d. Accrued interest expense on the mortgage payable e. Accrued inc ome tax expense of $38,000 5. Post adjusting entries and prepare an adjusted trial balance 6. Prepare a multi-step income statement and statement of retained earnings for the quarter ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. Assume that $12,858 of the mortgage payable is due within the next year. 7. Evaluate the company's success for the first quarter of operations by calculating the following ratios. The market price of the common stock is $40 on December 31, 2018. Round to two decimal places a. Times interest earned b. Debt to equity c. Ea rnings per share d. Price/earnings ratio e. Rate of return on common stock 8. The Castalia Company wants to expand and is considering options for raising additional cash The company estimates net income before the expansion of $260,000 in 2019 and that the expansion will provide additional operating income of $74,000 in 2019. The company intends to sell the shares nf treasury stock souse issued shares for the analysis rather than curre b. Depreciation on Store Fixtures, straight-line, 20 years, no residual value Accrued interest expense on the note payable for the store fixtures c. d. Accrued interest expense on the mortgage payable Accrued income tax expense of $38,000 e. 5. Post adjusting entries and prepare an adjusted trial balance 6. Prepare a multi-step income statement and statement of retained earnings for the quarter ended December 31, 2018. Prepare a classified balance sheet as of December 31, 2018. Assume that $12,858 of the mortgage payable is due within the next year. 7. Evaluate the company's success for the first quarter of operations by calculating the following ratios. The market price of the common stock is $40 on December 31, 2018. Round to two decimal places a. Times interest earned b. Debt to equity c. Earnings per share d. Price/earnings ratio e. Rate of return on common stock 8. The Castalia Company wants to expand and is considering options for raising additional cash The company estimates net income before the expansion of $260,000 in 2019 and that the expansion will provide additional operating income of $74,000 in 2019. The company intends to sell the shares of treasury stock, so use issued shares for the analysis rather than current shares outstanding. Compare these options, assuming a 30% income tax rate Plan 1: Issue 7,000 additional shares of common stock for $48 per share Plan 2: Issue $240,000 in 10-year, 8% bonds payable Which option will contribute more net income in 2019? Which option provides the highest EPS? Comp13-1 (similar to) Question Help * The Castalia Company is a retail company that began operations on October 1, 2013, when it incorporated in the state of North Carolina. The Castalia Company is authorized to issue 300,000 shares of $1 par value common stock and 35,000 shares of B% $40 par value preferred stock. The company sells a product that includes a one-year waranty and records estimated warranty payable each month Customers are charged a 7% state sales tax The company uses a perpetual inventory system There are three employees that are paid a monthly salary on the last day of the month Following is the chat of accounts for The Castalia Company. As a new business, all beginning balances are 50 Click the con to ew the chart of accounts. The Castalia Company completed the following transactions during the last quarter of 2013, its first year of operations (Click the icon to view the transactions Read the fequirememts Requirement 1a. In preparation for recording the transactions, prepare: An amortization schedule for the first 3 months of the mortgaga payable issued on October 1. Round interast calculations to the nearest dollar Total Beginning Principal Interest Payment Balance 10V01/2018 111/2018 12/1/2018 01/01/2019 Enter any number in the edit felds and then click Check Answer 64 Penaining Clear All Check Answer The Tusquittee Company Chart of Accounts Cash Dividends Payable-Common Merchandise Inventory Notes Payable Land Mortgages Payable Building Common Stock-$1 Par Value Store Fixtures Paid-in Capital in Excess of Par-Common Accumulated Depreciation Paid-in Capita from Treasury Stock Transactions Accounts Payable Retained Earnings Treasury Stock-Commorn Employee Income Taxes Payable FICA-OASDI Taxes Payable Cash Dividends FICA-Medicare Taxes Payable Sales Revenue Employee Health Insurance Payable Cost of Goods Sold Federal Unemployment Taxes Payable Salaries Expense State Unemployment Taxes Payable Payroll Tax Expense Income Tax Payable Utilities Expense Sales Tax Payable Depreciation Expense Estimated Warranty Payable Warranty Expense Homework: Comprehensive Problem #3 Save Score: 0 of 100 pts HW Score: 0%, 0 of 100 pts 1 of 1 (0 complete) Question Help Comp13-1 (similar to) The Castalia Company is a retail company that began operations on October 1 Following is the chart of accounts for The Castalia Company. As a new business, 2018, when it incorporated in the state of North Carolina. The Castalia Company all beginning balances are S0. is authorized to issue 300,000 shares of $1 par value common stock and 85,000 shares of 8%, $40 par value preferred stock. The company sells a product that includes a one-year warranty and records estimated warranty payable each month. Customers are charged a 7% state sales tax. The company uses a perpetual inventory system. There are three employees that are paid a monthlyC salary on the last day of the month EEB (Click the icon to view the chart of accounts.) The Castalia Company completed the following transactions during the last quarter of 2018, its first year of operations: Click the icon to view the transactions) Read the requirements. Requirement 1a. In preparation for recording the transactions, prepare: An amortization schedule for the first 3 months of the mortgage payable issued on October 1. Round interest calculations to the nearest dollar Total Ending Beginning Principal Balance Payment Expense Payment Balance 300,000.00 10/01/2018 1000 300,000.00 2750 3750 299,000.00 11/1/2018 2740.83 299,000.00 3750297,990.83 1009,17 2/1/2018 297,990.83 1018.42 2731.58 3750396,972.41 01/01/2019