Prepare the section of Stockholders’ Equity to be reported on Balance Sheet as at 31 Jan. 2021 Part 1: Journal entries, adjusting entries, calculation and the section of Stockholders'Equity|Crosby Inc., a merchandising company, has begun its business since 1 Jan. 2015.The selected information from the accounting records on 1 Jan. 2021 is as follows.The account of Retained Earnings has a credit balance of $321,000.The company uses the perpetual inventory system and the LIFO method for its inventory,reporting the beginning inventory as follows:1,000 units at a per-unit cost of $70 (purchased on 10 Dec. 2020)500 units at a per-unit cost of $75 (purchased on 20 Dec. 2020).The following is the information of stock that a company has in the accounting system on1 Jan. 2021.Preferred Stock: 5% cumulative, $40 par value, 1,000 shared authorized,issued and outstanding$40,000Common Stock: $20 par value, 50,000 shares authorized, 5,000 sharesissued and outstanding$100,000Additional Paid in Capital, Common Stock$75,000Additional Paid in Capital, Preferred Stock$25,000 1 Jan.Purchased a building and a truck for $95,000; a promissory note was signed. Theappraisal values are: $80,000 for the building and $20,000 for the truck.1 Jan.Sold a machine purchased on 1 Jan. 2019, for $24,000 cash. The acquisition cost ofthe machine was $52,000. It was expected to be used for 5 years, with the residualvalue of $4,000. The company used the double-declining-balance method for thismachine and the depreciation expense was already recorded before it was sold4 Jan.Wrote off a $1,600 customer's account balance, using the allowance method.7 Jan.Issued 4,000 shares of common stock at a price of $32 per share.10 Jan.Sold 700 units of inventory at a per-unit selling price of $210 by cash.11 Jan.Purchased an additional 600 units of inventory from a supplier on account at a per-unit cost of $80, with terms 4/10, n/45.18 Jan.Repurchased 2,000 shares of common stock for $28 per share.20 Jan.Sold 500 units of inventory at a per-unit selling price of $230 with terms 4/10, n/45.24 Jan.Collected a payment from the credit sales recorded on 20 Jan.25 JanMade a payment for the credit purchase recorded on 11 Jan.26 Jan.Issued 1,500 shares of treasury stock for $34 per share.28 Jan.Paid $27,800 of operating expenses.31 Jan.Declared dividends in the amount of $9,000, to be paid in April 2021.Additional information for adjustments1. To depreciate the building purchased on 1 Jan. 2021, the company uses the straight-line methodover 15 years, with a residual value of $4,000. For the truck purchased on 1 Jan. 2021, thecompany uses the units-of-production method. The company expects to use it for a total of120,000 kilometers, with a residual value of $3,000. It was used for 1,500 kilometers in January.2. The company uses the Aging of Accounts Receivable method to estimate bad debts. Thecompany has the following information of Accounts Receivable as at Jan. 31, 2021.Number of Days Past-due1- 3031 - 6061-90Accounts Receivable$75,000$42,000$8,000Estimated Uncollectible %2%4%7%Before the adjustment is recorded, the Allowance for Doubtful Accounts has a $1,160 creditbalance.

Stockholder’s equity statement includes the data related to the owner of the entity. It includes…

Answered: Part 1: Journal entries, adjusting…

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q