The stockholders’ equity section of Jarvis Corporation at December 31 is as follows

ACCOUNTING

The stockholders’ equity section of Jarvis Corporation at December 31 is as follows.
JARVIS CORPORATION
Balance Sheet (partial)

Paid-in capital
Preferred stock, cumulative, 10,000 shares authorized, 6,000 shares issued $ 300,000
and outstanding
Common stock, no par, 750,000 shares authorized, 600,000 shares issued 1,200,000

Total paid-in capital 1,500,000
Retained earnings 1,858,000

Total paid-in capital and retained earnings 3,358,000
Less: Treasury stock (10,000 common shares) (64,000)
Total stockholders’ equity $3,294,000

Instructions
From a review of the stockholders’ equity section, as chief accountant, write a memo to the president of the company answering the following questions.
(a) How many shares of common stock are outstanding?
(b) Assuming there is a stated value, what is the stated value of the common stock?
(c) What is the par value of the preferred stock?
(d) If the annual dividend on preferred stock is $30,000, what is the dividend rate on preferred stock?
(e) If dividends of $60,000 were in arrears on preferred stock, what would be the balance in Retained Earnings?

Click here for the SOLUTION

Posted in Homework Help | Comments Off

The balance in retained earnings on January 1, 2010, for Persinger Inc, was $800,000

ACCOUNTING

The balance in retained earnings on January 1, 2010, for Persinger Inc, was $800,000. During the year, the corporation paid cash dividends of $90,000 and distributed a stock dividend of $8,000. In addition, the company determined that it had understated its depreciation expense in prior years by $50,000. Net income for 2010 was $120,000.

Prepare retained earnings statement for 2010.

Click here for the SOLUTION

Posted in Homework Help | Comments Off

Courtside Concepts Co. began business on January 2, 2011

ACCOUNTING

24th Edition
Courtside Concepts Co. began business on January 2, 2011. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in 2012, before the Wage and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the employees’ earnings records were inadvertently destroyed.

None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of 6.0% and Medicare tax at the rate of 1.5% on salary. Data on dates of employment, salary rates, and employees’ income taxes withheld, which are summarized as follows, were obtained from personnel records and payroll records:

Instructions
1. Calculate the amounts to be reported on each employee’s Wage and Tax Statement (Form W-2) for 2011 arranging the data in the following form:

Employee Gross Earnings Federal Income Tax Withheld Social Security Tax Withheld Medicare Tax Withheld

2. Calculate the following employer payroll taxes for the year: (a) social security; (b) Medicare; (c) state unemployment compensation at 4.6% on the first $10,000 of each employee’s earnings; (d) federal unemployment compensation at 0.8% on the first $10,000 of each employee’s earnings; (e) total.

Click here for the SOLUTION

Posted in Homework Help | Comments Off

Monat Construction Company, Inc., entered into a firm fixed price contract with Hyatt Clinic on July 1, 2010 to construct a four-story office building

ACCOUNTING

Monat Construction Company, Inc., entered into a firm fixed price contract with Hyatt Clinic on July 1, 2010, to construct a four-story office building. At that time, Monat estimated that it would take between 2 and 3 years to complete the project. The total contract price for construction of the building is $4,400,000. Monat appropriately accounts for this contract under the completed-contract method in its financial statements and for income tax reporting. The building was deemed substantially completed on December 31, 2012. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to the Hyatt Clinic under the contract are shown below.

(a) Prepare schedules to compute the amount to be shown as “Cost of uncompleted contract in excess of related billings” or “Billings on uncompleted contract in excess of related costs” at December 31, 2010, 2011, and 2012. Ignore income taxes. Show supporting computations in good form
(b) Prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2010, 2011, and 2012. Ignore income taxes. Show supporting computations in good form

Click here for the SOLUTION

Posted in Homework Help | Comments Off

F. Calvert and G. Powers have capital balances on January 1 of $50,000 and $40,000, respectively

ACCOUNTING

E12-4 F. Calvert and G. Powers have capital balances on January 1 of $50,000 and $40,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $20,000 for Calvert and $12,000 for Powers, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 60% by Calvert and 40% by Powers.

Instructions
(a) Prepare a schedule showing the distribution of net income, assuming net income is (1) $50,000 and (2) $36,000.
(b) Journalize the allocation of net income in each of the situations above.

Click here for the SOLUTION

Posted in Homework Help | Comments Off

The stockholders’ equity accounts of Hashmi Company at January 1, 2010, are as follows

ACCOUNTING

P14-2A The stockholders’ equity accounts of Hashmi Company at January 1, 2010, are as follows.

Preferred Stock, 6%, $50 par : $600,000
Common Stock, $5 par: 800,000
Paid-in Capital in Excess of Par Value-Preferred Stock: 200,000
Paid-in Capital in Excess of Par Value-Common Stock: 300,000
Retained Earnings: 800,000

There were no dividends in arrears on preferred stock. During 2010, the company had the following transactions and events.

July 1 Declared a $0.50 cash dividend on common stock.
Aug. 1 Discovered $25,000 understatement of 2009 depreciation. Ignore income taxes.
Sept. 1 Paid the cash dividend declared on July 1.
Dec. 1 Declared a 10% stock dividend on common stock when the market value of the stock was $18 per share.
Dec. 15 Declared a 6% cash dividend on preferred stock payable January 15, 2011.
Dec. 31 Determined that net income for the year was $355,000.
Dec. 31 Recognized a $200,000 restriction of retained earnings for plant expansion.

Instructions
(a) Journalize the transactions, events, and closing entry.
(b) Enter the beginning balances in the accounts, and post to the stockholders’ equity accounts. (Note: Open additional stockholders’ equity accounts as needed.)
(c) Prepare a retained earnings statement for the year.
(d) Prepare a stockholders’ equity section at December 31, 2010.

Click here for the SOLUTION

Posted in Homework Help | Comments Off

The comparative balance sheets for Redwood Corporation for 2011 and 2012 follow

ACCOUNTING

The comparative balance sheets for Redwood Corporation for 2011 and 2012 follow:

Balance Sheets
As of December 31
2011
Assets
Cash 40,600
Accounts Receivable 22,000
Merchandise Inventory 176,000
Prepaid Rent 4,800
Equipment 288,000
Accumulated Depreciation (236,000)
Land 80,000
Total Assets $375,400

2012
Assets
Cash 68,800
Accounts Receivable 30,000
Merchandise Inventory 160,000
Prepaid Rent 2,400
Equipment 256,000
Accumulated Depreciation (146,800)
Land 192,000
Total Assets $562,400

Liabilities
2011
Accts Payable (Inventory) 76,000
Salaries Payable 24,000

2012
Accts Payable (Inventory) 67,000
Salaries Payable 28,000
2011
Stockholders Equity
Common Stock, $25 par value 200,000
Retained Earnings 75,400
Total Liabilities and Stockholders Equity 375,400

2012
Stockholders Equity
Common Stock, $25 par value 250,000
Retained Earnings 217,400
Total Liabilities and Stockholders Equity 562,400

Income Statement
For the Year Ended December 31, 2012
Sales Revenue 1,500,000
Cost of Goods Sold (797,200)
Gross Profit 702,800
Operating Expense
Depreciation expense (22,800)
Rent expense (24,000)
Salaries expense (256,000)
Other operating expense (258,000)
Net Income $142,000

Other information
1. Purchased land for $112,000
2. Purchased new equipment for $100,000
3. Sold old equipment that cost $132,000 with accumulated depreciation of $112,000 for $20,000 cash.
4. Issued Common Stock for $50,000

Required
Prepare the statement of cash flows for 2012 using the indirect method.

Click here for the SOLUTION

Posted in Homework Help | Comments Off

On October 31, the stockholders’ equity section of Huth Company consists of common stock $300,000 and retained earnings $900,000

ACCOUNTING

On October 31, the stockholders’ equity section of Huth Company consists of common stock $300,000 and retained earnings $900,000. Huth is considering the following two courses of action:

(1) Declaring a 5% stock dividend on the 30,000, $10 par value shares outstanding, or
(2) Effecting a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $14 per share.

Instructions
Prepare a tabular summary of the effects of the alternative actions on the components of stockholders’ equity, outstanding shares, and par value per share. Use the following column headings: Before Action, After Stock Dividend, and After Stock Split

Click here for the SOLUTION

Posted in Homework Help | Comments Off

During 2010, Jester Corporation had the following transactions and events

ACCOUNTING

E14-6 During 2010, Jester Corporation had the following transactions and events.

1.Declared a cash dividend.
2.Issued par value common stock for cash at par value.
3.Completed a 2-for-1 stock split in which $10 par value stock was changed to $5 par value stock.
4.Declared a small stock dividend when the market value was higher than par value.
5.Made a prior period adjustment for overstatement of net income.
6.Issued the shares of common stock required by the stock dividend declaration in item no. 4 above.
7.Paid the cash dividend in item no. 1 above.
8.Issued par value common stock for cash above par value.

Instructions
Indicate the effect(s) of each of the foregoing items on the subdivisions of stockholders’ equity. Present your answer in tabular form with the following columns (Capital Stock, Additional, Retained earnings). Use (I) for increase, (D) for decrease, and (NE) for no effect. Item no. 1 is given as an example.

1. Capital Stock = NE, Additional = NE, Retained earnings = D.

Click here for the SOLUTION

Posted in Homework Help | Comments Off

Your professor has asked you to complete a research paper concerning the link between the auditing profession and financial reporting standard setters

ACCOUNTING

Problem 1-34 Your professor has asked you to complete a research paper concerning the link between the auditing profession and financial reporting standard setters and regulators.

Required:
For each independent situation, determine which regulating or standard-setting body you should research:
(a) The entity that sets accounting standards for the government sector.
(b) The entity that decides what is required to become a licensed CPA and conduct work as a CPA.
(c) The entity that sets standards for audits of publicly traded companies.
(d) The entity that sets financial reporting standards in the U.S.
(e) The entity that prepares and administers the Uniform CPA Exam.
(f) The entity that has ultimate authority over public company reports as well as accounting and reporting standards.

Click here for the SOLUTION

Posted in Homework Help | Comments Off