The following adjusted trial balance of Webb Trucking Company (A+)

The following adjusted trial balance of Webb Trucking Company.

Account Title Debit Credit

Cash $7,000

Accounts receivable 16,500

Office supplies 2,000

Trucks 170,000

Accumulated depreciation—Trucks $35,000

Land 75,000

Accounts payable 11,000

Interest payable 3,000

Long-term notes payable 52,000

K. Webb, Capital 161,000

K. Webb, Withdrawals 19,000

Trucking fees earned 128,000

Depreciation expense—Trucks 22,500

Salaries expense 60,000

Office supplies expense 7,000

Repairs expense—Trucks 11,000

Totals $390,000 $390,000

The K. Webb, Capital, account balance is $161,000 at December 31, 2010.

Required:

(1) Prepare the income statement for the year ended December 31, 2011.

(2) Prepare the statement of owner’s equity, for the year ended December 31, 2011.

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Use the March 31 fiscal year-end information from the following ledger accounts (A+)

Use the March 31 fiscal year-end information from the following ledger accounts (assume that all accounts have normal balances).

General Ledger

M. Mallon, Capital Acct. No. 301 Salaries Expense Acct.No. 622

Date PR Debit Credit Balance Date PR Debit Credit Balance

Mar. 31 G2 42,000 Mar. 31 G2 21,000

M. Mallon, Withdrawals Acct. No. 302 Insurance Expense Acct.No. 637

Date PR Debit Credit Balance Date PR Debit Credit Balance

Mar. 31 G2 25,000 Mar. 31 G2 4,500

Services Revenue Acct. No. 401 Rent Expense Acct. No. 640

Date PR Debit Credit Balance Date PR Debit Credit Balance

Mar. 31 G2 74,000 Mar. 31 G2 9,600

Depreciation Expense Acct. No. 603 Income Summary Acct. No. 901

Date PR Debit Credit Balance Date PR Debit Credit Balance

Mar. 31 G2 17,000

Required:

1.Prepare closing journal entries from above ledger accounts.

2. Post the above entries to their respective ledger accounts.

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Below is a Trial Balance for MSI as of December 31, 2011 (A+)

Below is a Trial Balance for MSI as of December 31, 2011. Their bookkeeper forgot to record some transactions (Listed in tab .2 \”Unrecorded Transactions\”).

Marqui Studios, Inc. (MSI) As of December 31, 2011

Account Number Account Name Debit Credit

100 Bank of America Account Ending 123 10,000

150 Studio Equipment 3,500

151 Camera Equipment 1,700

170 Inventory 500

175 Security Deposit 1,000

200 Accounts Payable 100

210 Dividends Payable

215 Bonds

216 Discount/Premium on Bonds

250 Notes Payable

300 Common Stock, 100 shares issued, 1,000 authorized, $1 par 100

310 Additional Paid in Capital 900

320 Cash Dividends

350 Retained Earnings 12,000

399 Treasury Stock

400 Service Revenue 31,651

500 Cost of Goods Sold 800

501 Automobile Expense 190

502 Books & Music 132

503 Business Meals/ Meeting 293

504 Commercial Property Tax 210

505 Dues and Subscriptions 318

506 Insurance 775

507 Licenses and Permits 25

508 Merchant Fees 1,100

509 Non Employee Compensation 1,007

510 Office Furniture 420

511 Office Supplies 725

512 Other Expenses 22

513 Postage and Delivery 22

514 Printing and Reproduction 7

515 Professional Development 150

516 Professional Fees:Accounting 92

517 Professional Viewings 606

518 Rent 16,300

519 Travel 314

520 Utilities 4,500

521 Interest Expense 43

522 Lease Expense

599 Gain/Loss on Sale

44,751 44,751

Record each event in tab .3 \”Journal Entries.\” Hint: Not every transaction will require a journal entry.

1 On January 2, 2011 MSI decided to accept Mike as a shareholder. They issued an additional 100 shares of common stock in exchange for $1,500

2 On January 10, 2011, Bob decided to sell back to the company his 10 shares of stock for $200 (Hint: Treasury Stock)

3 On January 15, 2011, Sue and Mike (the board members), decided to declare a 10 cent per share dividend for the shareholders of record on January 1, 2011

4 On December 15, 2011, checks were sent out from MSI\’s Bank of America account to the shareholders for their dividends

5 On January 1, 2011, MSI issued 1 bond, $1,000 face value, at 98. This bond pays interest annually on December 30 at an annual rate of 12%. The bond is a 5 year bond. (Hint: Interest is calculated on the face value of a bond)

6 On August 1, 2011, Mike purchases the 10 treasury shares from MSI for $150. (Hint: Is there a Gain or Loss on Sale? This does not affect the Common Stock Account)

7 On July 1, 2011 Mike lends MSI $10,000. The company will repay Mike his principal and interest on July 1, 2012 (the following year). The interest rate is 6% per year.

8 On December 30, 2011, MSI issues a check to the sole bond holder in the amount of $120. (Hint: Don\’t forget to amortize the bond on a straight line basis over 5 years)

9 On December 31, 2011; MSI decides to pay off the loan to Mike in its entirety (including interest).

10 On December 1, 2011, MSI decides to lease a copier for $100 per month. The copier is delivered and setup by the vendor. The lease is a 12 month operating lease. The first payment is due on January 1, 2012.

11 On December 31, 2011; Accrue the operating lease.

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Allyn, Inc., has the following owners’ equity section in its November 30, 2010, balance sheet (A+)

Allyn, Inc., has the following owners\’ equity section in its November 30, 2010, balance sheet:

Paid-in capital:

14% preferred stock, $68 par value, 1,500 shares

authorized, issued,and outstanding $?

Common stock, $8 par value, 150,000 shares

authorized, ? shares issued, ? shares outstanding 240,000

Additional paid-in capital on common stock 510,000

Additional paid-in capital from treasury stock 13,000

Retained earnings 81,000

Less: Treasury stock, at cost (1,900 shares of common) (18,000)

Total stockholders\’ equity $?

Required:

(a) Calculate the amount of the total annual dividend requirement on preferred stock. (

(b) Calculate the amount that should be shown on the balance sheet for preferred stock.

(c) Calculate the number of shares of common stock that are issued and the number of shares of common stock that are outstanding.

(d) On January 1, 2010, the firm\’s balance sheet showed common stock of $200,000 and additional paid-in capital on common stock of $470,000. The only transaction affecting these accounts during 2010 was the sale of some common stock. Calculate the number of shares that were sold and the selling price per share. (Round your answers to the nearest whole number.

(e) Describe the transaction that resulted in the additional paid-in capital from treasury stock.

(f) The retained earnings balance on January 1, 2010, was $99,000. Net income for the past 11 months has been $38,000. Preferred stock dividends for all of 2010 have been declared and paid. Calculate the amount of dividends on common stock during the first 11 months of 2010.

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On May 4, 2010, Docker, Inc., purchased 600 shares of its own common stock in the market at a price of $18.80 per share (A+)

On May 4, 2010, Docker, Inc., purchased 600 shares of its own common stock in the market at a price of $18.80 per share. On September 19, 2010, 350 of these shares were sold in the open market at a price of $20.50 per share. There were 35,000 shares of Docker common stock outstanding prior to the May 4 purchase of treasury stock. A $.25 per share cash dividend on the common stock was declared and paid on June 15, 2010.

(a) Prepare the journal entry on Docker\’s financial statements of the purchase of the treasury stock on May 4.

(b) Prepare the journal entry on Docker\’s financial statements of the declaration and payment of the cash dividend on June 15

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Homestead Oil Corp. was incorporated on January 1, 2010, and issued the following stock for cash (A+)

Homestead Oil Corp. was incorporated on January 1, 2010, and issued the following stock for cash:

760,000 shares of no-par common stock were authorized; 150,000 shares were issued on January 1, 2010, at $19.00 per share. 210,000 shares of $120 par value, 9.00% cumulative, preferred stock were authorized, and 74,000 shares were issued on January 1, 2010, at $140 per share. Net income for the years ended December 31, 2010 and 2011, was $1,310,000 and $2,470,000, respectively. No dividends were declared or paid during 2010. However, on December 28, 2011, the board of directors of Homestead declared dividends of $1,440,000, payable on February 12, 2012, to holders of record as of January 19, 2012.

(a) Prepare the journal entry for the issuance of common stock and preferred stock on January 1, 2010

(b) Prepare the journal entry for the declaration of dividends on December 28, 2011.

(c) Prepare the journal entry for the payment of dividends on February 12, 2012.

(d) Of the total amount of dividends declared during 2011, how much will be received by preferred shareholders?

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Assume instead that the proceeds were $3,540,000 (A+)

(a) Assume instead that the proceeds were $3,540,000. Record the journal entry to show the payment of semiannual interest and the related discount amortization on June 30, 2010, assuming that the discount of $60,000 is amortized on a straight-line basis.

Use the following transactions.

a. Income tax expense of $783 for the current period is accrued. Of the accrual, $268 represents deferred income taxes.

b. Bonds payable with a face amount of $5,600 are issued at a price of 99.

c. Of the proceeds from the bonds in part b, $4,150 is used to purchase land for future expansion.

d. Because of warranty claims, finished goods inventory costing $134 is sent to customers to replace defective products.

e. A three-month, 10% note payable with a face amount of $27,000 was signed. The bank made the loan on a discount basis.

f. The next installment of a long-term serial bond requiring an annual principal repayment of $35,000 will become due within the current year.

(b) Record the journal entries to show each transaction/adjustment.

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On January 1, 2010, Drennen, Inc., issued $3.6 million face amount of 10-year, 14% stated rate bonds (A+)

On January 1, 2010, Drennen, Inc., issued $3.6 million face amount of 10-year, 14% stated rate bonds when market interest rates were 12%. The bonds pay semiannual interest each June 30 and December 31 and mature on December 31, 2019.

Required:

(a) Using the present value tables calculate the proceeds (issue price) of Drennen, Inc.\’s, bonds on January 1, 2010, assuming that the bonds were sold to provide a market rate of return to the investor

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On November 1, 2010, Gordon Co. collected $9,540 in cash from its tenant as an advance rent payment on its store location (A+)

On November 1, 2010, Gordon Co. collected $9,540 in cash from its tenant as an advance rent payment on its store location. The six-month lease period ends on April 30, 2011, at which time the contract may be renewed.

(a) Record the journal entry to show the effect of the six months rent collected in advance on November 1, 2010 for Gordon Co.

(b) Record the journal entry to show the effect of the adjustment that will be made at the end of every month to show the amount of rent \”earned\” during the month for Gordon Co.

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Prepare an answer sheet with the following column headings (A+)

Prepare an answer sheet with the following column headings. For each of the following transactions or adjustments, indicate the effect of the transaction or adjustment on assets, liabilities, and net income by entering for each account affected the account name and amount and indicating whether it is an addition (+) or a subtraction (-) or NE for no effect. Transaction a has been done as an illustration. Net income is notaffected by every transaction. In some cases, only one column may be affected because all of the specific accounts affected by the transaction are included in that category.

a. Recorded $200 of depreciation expense.

b. Sold land that had originally cost $13,700 for $11,100 in cash.

c. Recorded a $68,000 payment for the cost of developing and registering a patent.

d. Recognized periodic amortization for the patent (in part c) using the maximum statutory useful life.

e. Capitalized $3,000 of cash expenditures made to extend the useful life of production equipment.

f. Expensed $1,800 of cash expenditures incurred for routine maintenance of production equipment.

g. Sold a used machine for $9,000 in cash. The machine originally cost $26,000 and had been depreciated for the first two years of its five-year useful life using the double-declining-balance method.

h. Purchased a business for $333,000 in cash. The fair market values of the net assets acquired were as follows: Land, $39,400; Buildings, $195,000; Equipment, $91,000; and Long-Term Debt, $69,200.

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