![Fundamental Accounting Principles -Hardcover](https://www.bartleby.com/isbn_cover_images/9780077862275/9780077862275_largeCoverImage.gif)
Requirement-1:
To prepare:
The
Requirement-1:
![Check Mark](/static/check-mark.png)
Answer to Problem 2APSA
Solution:
The journal entries to record the transactions for 2016 are as follows:
Journal entries | |||
Date | Account title | Debit | Credit |
Jan. 1 | $ 80,000 | ||
Cash | $ 80,000 | ||
Jan. 5 | $ 72,000 | ||
Common Dividend Payable | $ 72,000 | ||
Feb. 28 | Common Dividend Payable | $ 72,000 | |
Cash | $ 72,000 | ||
Jul. 6 | Cash | $ 36,000 | |
Treasury Stock | $ 30,000 | ||
Paid in excess par- Treasury stock | $ 6,000 | ||
Aug. 22 | Cash | $ 42,500 | |
Paid in excess par- Treasury stock | $ 6,000 | ||
Retained earnings (50000-42500-6000) | $ 1,500 | ||
Treasury Stock | $ 50,000 | ||
Sept. 5 | Retained earnings | $ 80,000 | |
Common Dividend Payable | $ 80,000 | ||
Oct. 28 | Common Dividend Payable | $ 80,000 | |
Cash | $ 80,000 | ||
Dec. 31 | Income Summary | $ 388,000 | |
Retained earnings | $ 388,000 |
Explanation of Solution
Explanation:
The journal entries to record the transactions for 2016 are explained as follows:
Journal entries | |||
Date | Account title | Debit | Credit |
Jan. 1 | Treasury Stock | $ 80,000 | |
Cash | $ 80,000 | ||
(Being 4000 treasury shares purchased @ $20 each for total $80,000) | |||
Jan. 5 | Retained earnings | $ 72,000 | |
Common Dividend Payable | $ 72,000 | ||
(Being Cash dividend declared on (40000-4000) 36000 outstanding shares @ $2 each for total $72,000) | |||
Feb. 28 | Common Dividend Payable | $ 72,000 | |
Cash | $ 72,000 | ||
(Being Cash dividend declared paid in cash) | |||
Jul. 6 | Cash | $ 36,000 | |
Treasury Stock | $ 30,000 | ||
Paid in excess par- Treasury stock (36000-30000) | $ 6,000 | ||
(Being 1500 treasury shares sold for $24 each cash = (1500*24) = $36,000. The cost of these treasury stock is (1500*20) = $30,000 | |||
Aug. 22 | Cash | $ 42,500 | |
Paid in excess par- Treasury stock | $ 6,000 | ||
Retained earnings (50000-42500-6000) | $ 1,500 | ||
Treasury Stock | $ 50,000 | ||
(Being 2500 treasury shares sold for $17 each cash = (2500*17) = $42,500. The cost of these treasury stock is (2500*20) = $50,000 | |||
Sept. 5 | Retained earnings | $ 80,000 | |
Common Dividend Payable | $ 80,000 | ||
(Being Cash dividend declared on (36000+1500+2500)= 40,000 outstanding shares @ $2 each for total $80,000) | |||
Oct. 28 | Common Dividend Payable | $ 80,000 | |
Cash | $ 80,000 | ||
(Being Cash dividend declared paid in cash) | |||
Dec. 31 | Income Summary | $ 388,000 | |
Retained earnings | $ 388,000 | ||
(Being net income for the year 388,000 closed) |
Conclusion:
Hence, the journal entries to record the transactions for 2016 are prepared.
2)
To prepare:
The Statement of Retained earnings for the year ended December 31, 2016
2)
![Check Mark](/static/check-mark.png)
Answer to Problem 2APSA
Solution:
The Statement of Retained earnings for the year ended December 31, 2016 is as follows:
Statement of Retained earnings | |
For the year ended December 31, 2016 | |
Retained Earnings balance as on Dec. 31, 2015 | $ 270,000 |
Net Income for the year 2016 | $ 388,000 |
Cash Dividends Declared | $ (152,000) |
Treasury stock adjustment | $ (1,500) |
Retained Earnings balance as on Dec. 31, 2016 | $ 504,500 |
Explanation of Solution
Explanation:
The Statement of Retained earnings for the year ended December 31, 2016 is explained as follows:
Statement of Retained earnings | |
For the year ended December 31, 2016 | |
Retained Earnings balance as on Dec. 31, 2015 | $ 270,000 |
Add: Net Income for the year 2016 | $ 388,000 |
Less: Cash Dividends Declared (72000+80000) | $ (152,000) |
Less: Treasury stock adjustment | $ (1,500) |
Retained Earnings balance as on Dec. 31, 2016 | $ 504,500 |
Conclusion:
Hence Retained Earnings balance as on Dec. 31, 2016 is $504,500
Requirement-3:
To prepare:
The
Requirement-3:
![Check Mark](/static/check-mark.png)
Answer to Problem 2APSA
Solution:
The Stockholder's Equity Section of the Balance sheet as on December 31, 2016 is as follows:
Stockholder's Equity Section of the Balance sheet | |
As on December 31, 2016 | |
Common Stock-$10 par value, 100,000 shares authorized, 40,000 shares issued and outstanding | $ 400,000 |
Paid in capital in excess of par value, common stock | $ 60,000 |
Retained earnings | $ 504,500 |
Total Stock holder's Equity | $ 964,500 |
Explanation of Solution
Explanation:
The Stockholder's Equity Section of the Balance sheet as on December 31, 2016 is explained as follows:
Stockholder's Equity Section of the Balance sheet | |
As on December 31, 2016 | |
Common Stock-$10 par value, 100,000 shares authorized, 40,000 shares issued and outstanding | $ 400,000 |
Paid in capital in excess of par value, common stock | $ 60,000 |
Retained earnings | $ 504,500 |
Total Stock holder's Equity | $ 964,500 |
Conclusion:
Hence Total Stock holder's Equity as on Dec. 31, 2016 is $964,500
Want to see more full solutions like this?
Chapter 13 Solutions
Fundamental Accounting Principles -Hardcover
- Consider the following information for a particular company and calculate the gross profit percentage. Sales Cost of goods sold Beginning inventory Ending inventory Beginning accounts receivable $29,100,120 $21,225,000 55,612 53,644 2,279,112 Beginning allowance for bad debts (125,560) Ending accounts receivable 2,345,591 Ending allowance for bad debts (113,824)arrow_forward5 PTSarrow_forwardAt what net value should this equipment be recorded?arrow_forward
- Given the following information how much raw material was transferred to work in progress on January 31? Inventory on January 1 is $350,000, raw materials purchased in January are $860,000, and raw materials inventory on January 31 is $240,000. A: $880,000 B: $970,000 C: $650,000 D: $780,000arrow_forwardOn October 1, 2022, Vyom Industries purchased a machine for $180,000. The estimated service life is 8 years with a $20,000 residual value. Vyom records partial-year depreciation based on the number of months in service. Depreciation for 2022, using the double-declining-balance method, would be _. Solve thisarrow_forwardcesi Required information [The following information applies to the questions displayed below] On July 23 of the current year, Dakota Mining Company pays $8,595,840 for land estimated to contain 9,768,000 tons of recoverable ore. It installs and pays for machinery costing $1,074,480 on July 25. The company removes and sells 502,500 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. Required: Prepare entries to record the following. (a) The purchase of the land. (b) The cost and installation of machinery. (c) The first five months' depletion assuming the land has a net salvage value of zero after the ore is mined. (d) The first five months' depreciation on the machinery. Complete this question by entering your answers in the tabs below. Required A Required B Required C1 Required C2 Required D1 Required D2arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
![Text book image](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)