Helen Parish started a design company on January 1, Year 1. On April 1, Year 1, Parish borrowed cash from a local bank by issuing a one-year $41,600 face value note with annual interest based on an 11 percent discount. During Year 1, Parish provided services for $34,850 cash.
Helen Parish started a design company on January 1, Year 1. On April 1, Year 1, Parish borrowed cash from a local bank by issuing a one-year $41,600 face value note with annual interest based on an 11 percent discount. During Year 1, Parish provided services for $34,850 cash.
Helen Parish started a design company on January 1, Year 1. On April 1, Year 1, Parish borrowed cash from a local bank by issuing a one-year $41,600 face value note with annual interest based on an 11 percent discount. During Year 1, Parish provided services for $34,850 cash.
Helen Parish started a design company on January 1, Year 1. On April 1, Year 1, Parish borrowed cash from a local bank by issuing a one-year $41,600 face value note with annual interest based on an 11 percent discount. During Year 1, Parish provided services for $34,850 cash.
Required Answer the following questions. (Hint: Record the events in T-accounts prior to answering the questions.)
What is the amount of total liabilities on the December 31, Year 1, balance sheet?
What is the amount of net income on the Year 1 income statement?
What is the amount of cash flow from operating activities on the Year 1 statement of cash flows?
Provide the general journal entries necessary to record issuing the note on April 1, Year 1; recognizing accrued interest on December 31, Year 1; and repaying the loan on March 31, Year 2.
Transcribed Image Text:Problem (I.) Prepare journal entries for the following transactions (5 pts per journal
entry for a total of 75 pts.)
Opening Data:
P/S $100 par, guaranteed 3% dividend, 0 shares outstanding
C/S $2.00 par, 0 shares outstanding
Jan. 1. Issued 50,000 shares of Common Stock to purchase a building worth $600,000.
Jan. 2. Issued 3,000 shares of Preferred Stock to purchase Land worth $412,000.
Jan. 3. Sold 70,000 shares of Common Stock for S15 per share.
Feb. 4. Purchased 2,000 shares of our own Common Stock for $12/share.
Mar.5. Declared an annual cash dividend on the Preferred Stock to shareholders of record
on March 15 to be paid on March 29.
Mar. 6. Declared a $0.20 per share Common Stock cash dividend to shareholders of
record on March 15 to be paid March 30.
Mar. 15 Record Date(s)
Mar. 29 Paid the Preferred Stock cash dividend declared on March 5.
Mar. 30 Paid the Common Stock cash dividend declared on March 6.
May 15 Declared a 5% Common Stock Dividend, market value of each share is
$18 per share to shareholders of record May 21 to be issued May 31.
May 31 Issued the Common Stock Dividend declared on May 15.
July 15 Sold 800 shares of the Treasury Stock purchased above on Feb. 4 for $16/sh.
Aug. 16 Declared a Common Stock 2 for 1 stock split, NO J/E needed BUT what 2 items
change and what are the 2 new values due to this stock split- there are 2 answers here??
Sept. 17 Sold 10,000 shares of C/S for $6 per share.
Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
