Make Journal Entries for these questions , T account and Balance


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Make Journal Entries for these questions , T account and Balance sheet Accounting.docx Your company began operations on January 1, 2011. From January 1, 2012 – December 31, 2013 your company’s stock is traded on the NYSE with 4,000,000 common shares outstanding with a par value of $.25. At the close of December 31, 2014, your company’s stock was trading at $5.00 per share. On November 1st the stock was trading at $3.25. At the end of 2013 and 2012, the value of your stock was $3.80 and $2.90, respectively. Use the Cost Method for treatment of Treasury Stock. The inventory valuation used by your company is LIFO. The company’s inventory on January 1st, 2014 consists of 13,000 units. Prior Income S tatement Account Balances 2013 2012 Sales, net $ 2,280,000 $ 2,500,000 Cost of Goods S old 850,000 780,000 Wages E xpense 565,000 785,000 Utility Expense 37,050 37,500 Insurance E xpense 23,905 21,097 Rent Expense 18,009 17,080 Fuel E xpense 2,900 1,400 Office Supplies E xpense 6,000 5,000 Advertising Expense 23,000 25,000 Bad Debt E xpense 60,750 45,000 Depreciation E xpense 500,000 500,000 Interest Income 23,676 21,574 Interest Expense 56,250 56,250 Gain on S ale 34,900 Loss on Sale 120,000 Page 1 of 7 BAL ANCESHEE T December 31, Assets Cash Marketable S ecurities Accounts Receivable Allowance for Bad Debt Interest Receivable Prepaid Advertising Prepaid Insurance Prepaid Rent Office S upplies Inventory Office Furniture Equipment Accumulated Depreciation Long-Term Notes Receivable Land Patent L iabilities Accounts Payable Wages Payable Interest Payable Short-Term Notes Payable Deferred Revenue Dividends Payable Bond Interest Payable Long-Term Notes Payable Bonds Payable S tockholders’ E quity Common S tock Additional Paid-In Capital Treasury S tock Contributed Capital Retained E arnings 2013 2012 $ 525,710 $ 658,079 75,000 15,000 455,000 525,000 (25,000) (105,000) 23,676 21,574 139,836 148,945 29,050 34,982 3,520 5,400 975,000 775,000 Current Assets 2,201,792 2,078,980 5,000,000 5,000,000 (2,000,000) (1,500,000) 285,000 1,450,000 1,450,000 Non-Current Assets 4,735,000 4,950,000 Total Assets $ 6,936,792 $ 7,028,980 $ 450,000 $ 570,000 35,000 33,000 155,000 135,000 Current L iabilities 640,000 738,000 1,250,000 1,250,000 Total L iabilities 1,890,000 1,988,000 1,000,000 1,000,000 1,824,406 1,824,406 500,000 500,000 1,722,386 1,716,574 Total S tockholders’ E quity 5,046,792 5,040,980 Total L iabilities & SE $ 6,936,792 $ 7,028,980 Page 2 of 7 2014 TRANSACTION AND EVENT LIST VERSION A HINT: Before booking an entry, remember to evaluate the substance of each transaction/event. Do accounting standards require the event or transaction to be booked into your company’s accounting records? NOTE: All interest rates included in the transaction list are stated at an annual rate. January 1. On January 1st, The Board of Directors issued 250,000 additional shares (par of $.25) to raise capital for the New Year. Assume no change in price from Dec 31, 2013. 2. Purchased a truck for $230,000 cash on the 1 st of January. The truck will be depreciated over a 5 year period. You decide to use the 200% declining-balance depreciation method because it is determined that the truck will be more productive when it is newer. The truck has an estimated salvage value of $25,000. [Adjusting Entry Required] 3. Purchased new office equipment for $102,000 with cash from California Furniture on January 1, 2014. The new furniture will be depreciated over a ten-year period on a straight-line basis. The cabinet has an estimated salvage value of $5,000. [Adjusting Entry Required] 4. On January 1st, a 5 year, $135,000 long-term note payable was taken from a local bank. 5. On January 5th you receive payment from interest earned and accrued in 2013. 6. On January 22nd you purchased 8,500 additional units of inventory at a cost of $77 per unit. You paid 45% in cash and purchased the remainder on account. 7. On January 25th you pay $265,

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