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On January 1, 2018, the general ledger of Grand Finale Fireworks includes the following account balances: Credit Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Common Stock, $1 par value Additional Paid-in Capital Retained Earnings Totals January 29 Debit $44,300 47,700 9,100 80,000 January 30 $10,600 16,200 16.000 During January 2018, the following transactions occur: Manuary 2 Issue an additional 2,000 shares of $1 par value common stock for $40,000. Manuary 9 Provide services to customers on account, $18,800. anuary Purchase additional supplies on account, $6,500. 0 Banuary 12Repurchase 1,100 shares of treasury stock for $19 per share. Manuary 15Pay cash on accounts payable, $18.100. Banuary 21Provide services to customers for cash, $50,700 January 22 96,000 42,300 $181,100 $181,100 Receive cash on accounts receivable, $18,200. Declare a cash dividend of $0.20 per share to all shares outstanding on January 29. The dividend is payable on February 15, (Hint: Grand Finale Fireworks had 16,000 shares outstanding on January 1, 2018 and dividends are not paid on treasury stock.) Reissue 700 shares of treasury stock for $21 per share. January 31Pay cash for salaries during January, $43,600. The following information is available on January 31, 2018 a. Unpaid utilities for the month of January are $7,800. b. Supplies at the end of January total $6,700. c. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment w purchased, the company estimated a service life of three years and a residual value of $11,600. d. Accrued income taxes at the end of January are $2.700.

On January 1, 2018, the general ledger of Grand Finale Fireworks includes the following account balances: Credit Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Common Stock, $1 par value Additional Paid-in Capital Retained Earnings Totals January 29 Debit $44,300 47,700 9,100 80,000 January 30 $10,600 16,200 16.000 During January 2018, the following transactions occur: Manuary 2 Issue an additional 2,000 shares of $1 par value common stock for $40,000. Manuary 9 Provide services to customers on account, $18,800. anuary Purchase additional supplies on account, $6,500. 0 Banuary 12Repurchase 1,100 shares of treasury stock for $19 per share. Manuary 15Pay cash on accounts payable, $18.100. Banuary 21Provide services to customers for cash, $50,700 January 22 96,000 42,300 $181,100 $181,100 Receive cash on accounts receivable, $18,200. Declare a cash dividend of $0.20 per share to all shares outstanding on January 29. The dividend is payable on February 15, (Hint: Grand Finale Fireworks had 16,000 shares outstanding on January 1, 2018 and dividends are not paid on treasury stock.) Reissue 700 shares of treasury stock for $21 per share. January 31Pay cash for salaries during January, $43,600. The following information is available on January 31, 2018 a. Unpaid utilities for the month of January are $7,800. b. Supplies at the end of January total $6,700. c. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment w purchased, the company estimated a service life of three years and a residual value of $11,600. d. Accrued income taxes at the end of January are $2.700.

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter8: Liabilities And Stockholders' Equity
Section: Chapter Questions
Problem 8.1.2MBA
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On January 1, 2018, the general ledger of Grand Finale Fireworks includes the following account balances: Debit Credit $44,300 47,700 9,100 80,000 Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Common Stock, $1 par value Additional Paid-in Capital Retained Earnings Totals $10,600 16,200 16.000 During January 2018, the following transactions occur: January 2 Issue an additional 2,000 shares of $1 par value common stock for $40,000 January 9 Provide services to customers on account, $18,800. January Purchase additional supplies on account, $6,500. 10 96,000 42,300 $181,100 $181,100 January 12Repurchase 1,100 shares of treasury stock for $19 per share. January 15Pay cash on accounts payable, $18.100. January 21Provide services to customers for cash, $50,700. January Receive cash on accounts receivable. $18,200. 22 January 29 Declare a cash dividend of $0.20 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hint: Grand Finale Fireworks had 16,000 shares outstanding on January 1, 2018 and dividends are not paid on treasury stock.) January 30 Reissue 700 shares of treasury stock for $21 per share. January 31Pay cash for salaries during January, $43,600. The return on equity is: The following information is available on January 31, 2018 a. Unpaid utilities for the month of January are $7.800. b. Supplies at the end of January total $6,700. c. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $11,600. d. Accrued income taxes at the end of January are $2,700. Analyze the following for Grand Finale Fireworks: (a) Calculate the return on equity for the month of January. If the average return on equity for the industry for January is 2.50%, is the company more or less profitable than other companies in the same industry? Is the company more or less profitable than other companies? (b) How many shares of common stock are outstanding as of January 31, 2018? Earnings per share is: The number of common shares outstanding as of January 31, 2018 is (c) Calculate earnings per share for the month of January. (Hint: To calculate average shares of common stock outstanding take the beginning shares outstanding plus the ending shares outstanding and divide the total by 2.) If earnings per share was $2.40 last year (i.e., an average of $0.20 per month), is earnings per share for January 2018 better or worse than last year's average? % Is earnings per share for January 2018 better or worse than last year's average?
Transcribed Image Text:On January 1, 2018, the general ledger of Grand Finale Fireworks includes the following account balances: Debit Credit $44,300 47,700 9,100 80,000 Accounts Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Common Stock, $1 par value Additional Paid-in Capital Retained Earnings Totals $10,600 16,200 16.000 During January 2018, the following transactions occur: January 2 Issue an additional 2,000 shares of $1 par value common stock for $40,000 January 9 Provide services to customers on account, $18,800. January Purchase additional supplies on account, $6,500. 10 96,000 42,300 $181,100 $181,100 January 12Repurchase 1,100 shares of treasury stock for $19 per share. January 15Pay cash on accounts payable, $18.100. January 21Provide services to customers for cash, $50,700. January Receive cash on accounts receivable. $18,200. 22 January 29 Declare a cash dividend of $0.20 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hint: Grand Finale Fireworks had 16,000 shares outstanding on January 1, 2018 and dividends are not paid on treasury stock.) January 30 Reissue 700 shares of treasury stock for $21 per share. January 31Pay cash for salaries during January, $43,600. The return on equity is: The following information is available on January 31, 2018 a. Unpaid utilities for the month of January are $7.800. b. Supplies at the end of January total $6,700. c. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $11,600. d. Accrued income taxes at the end of January are $2,700. Analyze the following for Grand Finale Fireworks: (a) Calculate the return on equity for the month of January. If the average return on equity for the industry for January is 2.50%, is the company more or less profitable than other companies in the same industry? Is the company more or less profitable than other companies? (b) How many shares of common stock are outstanding as of January 31, 2018? Earnings per share is: The number of common shares outstanding as of January 31, 2018 is (c) Calculate earnings per share for the month of January. (Hint: To calculate average shares of common stock outstanding take the beginning shares outstanding plus the ending shares outstanding and divide the total by 2.) If earnings per share was $2.40 last year (i.e., an average of $0.20 per month), is earnings per share for January 2018 better or worse than last year's average? % Is earnings per share for January 2018 better or worse than last year's average?
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