journalize the selected transacations: Jan. 3 Issued 15,000 shares of $20 par common stock at $30, receiving cash. Feb. 15 Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash. May 1 Issued $500,000 of 10-year, 5% bonds at 104,
journalize the selected transacations:
|
Jan. |
3 |
Issued 15,000 shares of $20 par common stock at $30, receiving cash. |
|
Feb. |
15 |
Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash. |
|
May |
1 |
Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. |
|
16 |
Declared a quarterly dividend of $0.50 per share on common stock and $1.00 per share on |
|
|
26 |
Paid the cash dividends declared on May 16. |
|
|
Jun. |
1 |
Purchased 7,500 shares of Solstice Corp. at $40 per share plus a $150 brokerage commission. The investment is classified as an available-for-sale investment. |
|
8 |
Purchased 8,000 shares of treasury common stock at $33 per share. |
|
|
22 |
Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for $24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. |
|
|
30 |
Declared a $1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. |
|
|
Jul. |
11 |
Paid the cash dividends declared on Jun. 30 to the preferred stockholders. |
|
Aug. |
27 |
Received $27,500 dividend from Pinkberry Co. investment of Jun. 22. |
|
Oct. |
1 |
Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of $375. The bonds are classified as a held-to-maturity long-term investment. |
|
7 |
Sold, at $38 per share, 2,600 shares of treasury common stock purchased on Jun. 8. |
|
|
14 |
Received a dividend of $0.60 per share from the Solstice Corp. investment on Jun. 1. |
|
|
29 |
Sold 1,000 shares of Solstice Corp. at $45, including commission. |
|
|
31 |
Recorded the payment of semiannual interest on the bonds issued on May 1 and the amortization of the premium for six months. The amortization is determined using the straight-line method. |
Oct 1 Purchased $90,000 of Dream Inc 10 year 5% bonds, directly from the issuing company at their face amount plus accrued interest of $375. the bonds are classified as a held to maturity long term investment
|
Dec. |
31 |
Accrued interest for three months on the Dream Inc. bonds purchased on Oct. 1. |
|
31 |
Pinkberry Co. recorded total earnings of $240,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. |
|
|
31 |
The fair value for Solstice Corp. stock was $39.02 per share on December 31, Year 1. The investment is adjusted to fair value, using a valuation allowance account. Assume that Valuation Allowance for Available-for-Sale Investments had a beginning balance of zero. |
|
Income Statement data: |
|||
|
Advertising expense |
$150,000 |
||
|
Cost of merchandise sold |
3,700,000 |
||
|
Delivery expense |
30,000 |
||
|
|
30,000 |
||
|
Depreciation expense-store buildings and equipment |
100,000 |
||
|
Dividend revenue |
4,500 |
||
|
Gain on sale of investment |
4,980 |
||
|
Income of Pinkberry Co. investment |
76,800 |
||
|
Income tax expense |
140,500 |
||
|
Interest expense |
21,000 |
||
|
Interest revenue |
2,720 |
||
|
Miscellaneous administrative expense |
7,500 |
||
|
Miscellaneous selling expense |
14,000 |
||
|
Office rent expense |
50,000 |
||
|
Office salaries expense |
170,000 |
||
|
Office supplies expense |
10,000 |
||
|
Sales |
5,254,000 |
||
|
Sales commissions |
185,000 |
||
|
Sales salaries expense |
385,000 |
||
|
Store supplies expense |
21,000 |
||
|
|
|
|
Accounts payable |
$194,300 |
|
|
545,000 |
|
|
1,580,000 |
|
Accumulated depreciation—store buildings and equipment |
4,126,000 |
|
Allowance for doubtful accounts |
8,450 |
|
Available-for-sale investments (at cost) |
260,130 |
|
Bonds payable, 5%, due 20Y2 |
500,000 |
|
Cash |
246,000 |
|
Common stock, $20 par |
|
|
(400,000 shares authorized; 100,000 shares issued, 94,600 outstanding) |
2,000,000 |
|
Dividends: |
|
|
Cash dividends for common stock |
155,120 |
|
Cash dividends for preferred stock |
100,000 |
|
|
500,000 |
|
Income tax payable |
44,000 |
|
Interest receivable |
1,125 |
|
Investment in Pinkberry Co. stock (equity method) |
1,009,300 |
|
Investments-Dream Inc. bonds (long term) |
90,000 |
|
Merchandise inventory (December 31, Year 1), |
|
|
at lower of cost (FIFO) or market |
778,000 |
|
Office buildings and equipment |
4,320,000 |
|
Paid-in capital from sale of |
13,000 |
|
Excess of issue price over par: |
|
|
-Common stock |
886,800 |
|
-Preferred stock |
150,000 |
|
Preferred 5% stock, $80 par |
|
|
(30,000 shares authorized; 20,000 shares issued) |
1,600,000 |
|
Premium on bonds payable |
19,000 |
|
Prepaid expenses |
27,400 |
|
Retained earnings, January 1, Year 1 |
9,319,725 |
|
Store buildings and equipment |
12,560,000 |
|
Treasury stock |
|
|
(5,400 shares of common stock at cost of $33 per share) |
178,200 |
|
Unrealized gain (loss) on available-for-sale investments |
(6,500) |
|
Valuation allowance for available-for-sale investments |
(6,500) |
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