Financial Accounting Homework Packet PDF

**Homework Packet** **for** **Intro to** **Financial Accounting** **Spring 2025** **\ ** **Chapter 1 Homework** Submit your answers in CANVAS before it is due **When inputting your answers in CANVAS do not include \$ signs or commas in your answers.  DO NOT include words in your answer unles...

**Homework Packet** **for** **Intro to** **Financial Accounting** **Spring 2025** **\ ** **Chapter 1 Homework** Submit your answers in CANVAS before it is due **When inputting your answers in CANVAS do not include \$ signs or commas in your answers.  DO NOT include words in your answer unless specifically asked.** **Use the following information to answer questions 1 -- 10** For each item, determine the type of account (Asset, Liability, Stockholder's Equity, Dividends, Revenue or Expense) and the type of activity (Operating, Investing or Financing). **When answering the question, input ONLY the first letter, for example: if the answer was Liability input L as the answer.** +-----------------------+-----------------------+-----------------------+ | Item | Type of Account | Type of Activity | | | | | | | **A, L, SE, D, R or | **O, I, F** | | | E** | | +=======================+=======================+=======================+ | Borrow from the bank | 1. | 2. | +-----------------------+-----------------------+-----------------------+ | Purchase equipment | 3. | 4. | +-----------------------+-----------------------+-----------------------+ | Provide services to | 5. | 6. | | customers | | | +-----------------------+-----------------------+-----------------------+ | Pay dividends to | 7. | 8. | | stockholders | | | +-----------------------+-----------------------+-----------------------+ | Cost of salaries for | 9. | 10. | | employees | | | +-----------------------+-----------------------+-----------------------+ **Use the following to answer questions 11 -- 14** The company reports the following amounts at the end of the year: Revenues \$650,000 -------------- ----------- Dividends 20,000 Common stock 250,000 Expenses 500,000 Assets 900,000 Liabilities 440,000 11\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_ Calculate net income. 12\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_ Calculate stockholders' equity at the end of the period. 13\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_Calculate ending retained earnings: 14\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_Calculate beginning retained earnings: **\ Use the following to answer questions 15 - 19** The company had the following account balances at the end of December before preparing the financial statements: **Accounts** **Balances** ----------------------------- -------------- Beginning Retained earnings 150,000 Utilities expense 30,000 Common stock \$300,000 Accounts payable 25,000 Dividends 15,000 Salaries expense 450,000 Service revenue 600,000 Cash 20,000 Supplies 3,000 Equipment ? 15\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_What were total expenses for the year? 16\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Calculate their net income for the year. 17\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Calculate their **ending** balance in Retained Earnings. 18\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_What is their balance in stockholder's equity on 12/31. 19\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ What is the balance of the **Equipment** account. **Use the following to answer questions 20 -- 22** Determine ending retained earnings for years 1, 2 and 3. At the beginning of year 1, the retained earnings had a \$0 balance. Year Net Income Dividends Retained Earnings ------ ------------ ----------- ------------------- 1 \$100,000 \$30,000 **20.** 2 150,000 50,000 **21.** 3 170,000 40,000 **22.** **\ Use the following to answer questions 23 -- 28** The company provides food delivery services to construction sites. At the end of the year, the company reports the following amounts: Cash \$31,000 Service revenue \$840,000 --------------------- ---------- -- --------------------- ----------- Paper supplies used 8,000 Garage/Office 650,000 Paper supplies 1,000 Food expense 450,000 Note payable 500,000 Food trucks 350,000 Accounts payable 10,000 Maintenance expense 75,000 Salaries expense 200,000 Salaries payable 15,000 In addition, the company had common stock of **\$100,000** at the beginning of the year and issued an additional **\$50,000** of stock during the year. The company also had retained earnings of **\$275,000** at the beginning of the year and declared **\$25,000** in dividends during the year. 23\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Determine Net Income 24\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Determine ending Common Stock 25\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Determine ending Retained Earnings 26\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Determine Total Assets 27\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Determine Total Liabilities 28\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Determined Total Stockholders' Equity **\ ** **Use the following to answer questions 29 -- 32** Match the four underlying assumptions of Generally Accepted Accounting Principles with its description. +-----------------+-----------------+-----------------+-----------------+ | | | **Assumption** | **Description** | +=================+=================+=================+=================+ | 29. | \_\_\_\_\_ | Economic entity | a. | +-----------------+-----------------+-----------------+-----------------+ | 30. | \_\_\_\_\_ | Going concern | b. | +-----------------+-----------------+-----------------+-----------------+ | 31. | \_\_\_\_\_ | Periodicity | c. | +-----------------+-----------------+-----------------+-----------------+ | 32. | \_\_\_\_\_ | Monetary unit | d. | +-----------------+-----------------+-----------------+-----------------+ ***Use the following to answer questions 33 -- 40*** ***Income Statement*** ***Statement of Stockholders' Equity*** ---------------------------- ----------------------------------------- --------------------------------- ------------------------------------------ -------------------------- ***Revenues*** **\#33** ***Common stock*** ***Retained earnings*** ***Expenses:***   ***Beginning*** \$290,000 \$300,000 Salaries \$390,000 ***Issuance*** **\#35**   Administrative 125,000 ***Net income*** 118,000 Utilities [20,000] ***Dividends***   **\#36** Total expenses [535,000] ***Ending*** \$300,000 \$400,000 ***Net income*** **\#34** ***Balance Sheet*** ***[Assets]*** ***[Liabilities]*** Cash \$20,000 ***Accounts payable*** \$18,000 A/R 18,000 ***Notes payable*** [450,000 ] Supplies **\#37** ***Total liabilities*** \$468,000 Prepaid rent 4,500 ***[Stockholders' Equity]*** Equipment 325,000 ***Common stock*** ***?*** Building [800,000] ***Retained earnings*** ***[?]*** ***Total stockholders' equity*** ***[\#39]*** ***Total assets*** **\#38** ***Total L and SE*** ***\#40*** 33\. \$\_\_\_\_\_\_\_\_\_\_\_\_Revenue: 37. \$\_\_\_\_\_\_\_\_\_\_Supplies: 34\. \$\_\_\_\_\_\_\_\_\_\_\_\_Net Income: 38. \$\_\_\_\_\_\_\_\_\_\_Total Assets: 35\. \$\_\_\_\_\_\_\_\_\_\_\_\_Issuance: 39. \$\_\_\_\_\_\_\_\_\_\_Stockholders' Equity: 36\. \$\_\_\_\_\_\_\_\_\_\_\_\_Dividends: 40. \$\_\_\_\_\_\_\_\_\_\_Total L & SE: **Chapter 2 Homework** Submit your answers in CANVAS before it is due **Use the following to answer questions 1 -- 5** Determine if the normal balance is a Debit (D) or a Credit (C). **Input only the first letter of the answer (D or C).** +-----------------------+-----------------------+-----------------------+ | | Normal Balance | **Account** | | | | | | | **D or C** | | +=======================+=======================+=======================+ | 1 | \_\_\_\_\_\_\_\_ | Prepaid rent | +-----------------------+-----------------------+-----------------------+ | 2 | \_\_\_\_\_\_\_\_ | Salaries payable | +-----------------------+-----------------------+-----------------------+ | 3 | \_\_\_\_\_\_\_\_ | Common stock | +-----------------------+-----------------------+-----------------------+ | 4 | \_\_\_\_\_\_\_\_ | Dividends | +-----------------------+-----------------------+-----------------------+ | 5 | \_\_\_\_\_\_\_\_ | Service revenue | +-----------------------+-----------------------+-----------------------+ **Use the following to answer questions 6 -- 8** Analyze each transaction. Under each category in the accounting equation, indicate whether the transaction: A. increases, B. decreases, or C. has no effect. **The item (a) is provided as an example.** a. **Paid rent for the current month.** (Rent expense increases causing Stockholders' Equity to decrease, Cash used to pay, causing assets to decrease, and no effect on Liabilities). 6\. Purchase equipment by signing a note payable. 7\. Provide services to customers on account. 8\. Pay insurance for the current month. Asset Liability Stockholders' Equity --------- ------- ----------- ---------------------- **(a)** **B** **C** **B** 6. 7. 8. 9\. At the beginning of the month, the balance in the Retained Earnings account is **\$200,000** for the company. During the month the company had the following external transactions. (a) Issue common stock for cash \$20,000 ------ ---------------------------------------------------- ---------- (b)  Purchase equipment and pay cash 175,000 (c)  Provide services to customers in exchange for cash 220,000 (d) Pay dividends to stockholders 30,000 (e) Pay rent for the month 3,000 (f) Provide services to customers on account 25,000 (g) Pay workers\' salaries for the month 205,000 \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_Determine ending Retained Earnings. **\ Use the following to answer questions 10 -- 13** Indicate which of the following accounts should be debited and which should be credited. An example has been provided (ex). ***Purchase Office Supplies in exchange for cash*** Debit : N (Supplies) Credit: C (Cash)...see below. **Only include the letter of the account not the account name.** +-----------------+-----------------+-----------------+-----------------+ | D. Accounts | E. Dividends | I. Rent expense | M. Service | | payable | | | revenue | +=================+=================+=================+=================+ | A. Accounts | F. Equipment | J. Retained | N. Supplies | | receivable | | earnings | | +-----------------+-----------------+-----------------+-----------------+ | B. Cash | G. Notes | K. Salaries | O. Utilities | | | payable | expense | expense | +-----------------+-----------------+-----------------+-----------------+ | C. Common | H. Prepaid rent | L. Salaries | | | stock | | payable | | +-----------------+-----------------+-----------------+-----------------+ **Account Debited** **Account Credited** ---------- ----------------------------------------------------------------- --------------------- ---------------------- ***ex*** ***Purchase Office Supplies in exchange for cash*** ***N*** ***C*** 10. Pay rent in advance for the next three months. 11. Provide services to customers on account. 12. Pay for the current month's utilities. 13. Record salaries for the past two weeks; will be paid next week. **Use the following to answer questions 14 - 20** Post each transaction to the T-accounts below and compute the ending balances of each account. **The balances at the beginning of the week are shown in the T accounts. NOTE: The accounts are only a partial listing of the company's Chart of Accounts** Recorded transactions to be posted: **Debit** **Credit** **Debit** **Credit** --- --------------------- ------------ -------- -- ----------- --------------------- -------- -------- 1 Cash 10,000 4 Advertising expense 12,000 Accounts receivable 10,000 Accounts payable 12,000 2 Deferred revenue 7,000 5 Accounts payable 14,000 Service revenue 7,000 Cash 14,000 3 Accounts receivable 15,000 6 Office Supplies 200 Service revenue 15,000 Cash 200 Following are some (**not all**) of the accounts for the company with balances at the beginning of the week: Cash Accounts Receivable Office Supplies Accounts Payable -------- -- --------------------- -------- ----------------- -- ------------------ -- -- -- ------- 25,000 10,000 500 3,000 Deferred Revenue Service Revenue Advertising Expense ------------------ -------- ----------------- -- --------------------- -- ------- -- -- 10,000 50,000 5,000 14\. \$\_\_\_\_\_\_\_\_\_\_\_What is the Cash account balance at the end of the week? 15\. \$\_\_\_\_\_\_\_\_\_\_\_What is the Accounts Receivable account balance at the end of the week? 16\. \$\_\_\_\_\_\_\_\_\_\_\_What is the Office supplies account balance at the end of the week? 17\. \$\_\_\_\_\_\_\_\_\_\_\_What is the Accounts payable account balance at the end of the week? 18\. \$\_\_\_\_\_\_\_\_\_\_\_What is the Deferred revenue account balance at the end of the week? 19\. \$\_\_\_\_\_\_\_\_\_\_\_What is the Service revenue account balance at the end of the week? 20\. \$\_\_\_\_\_\_\_\_\_\_\_What is the Advertising expense account balance at the end of the week? **Use the following to answer questions 21 -- 27** +-----------------------+-----------------------+-----------------------+ | ASSETS | LIABILITIES & | INCOME STATEMENT | | | | ACCOUNTS | | | STOCKHOLDERS' EQUITY | | +=======================+=======================+=======================+ | A. Cash | F. Accounts Payable | K. Service Revenue | +-----------------------+-----------------------+-----------------------+ | B. Accounts | G. Salaries Payable | L. Advertising | | Receivable | | expense | +-----------------------+-----------------------+-----------------------+ | C. Supplies | H. Deferred revenue | M. Rent Expense | +-----------------------+-----------------------+-----------------------+ | D. Prepaid | I. Notes Payable | N. Salaries/Wage | | advertising | | expense | +-----------------------+-----------------------+-----------------------+ | E. Equipment | J. Retained Earnings | O. Utilities expense | +-----------------------+-----------------------+-----------------------+ **February 1^st^ transaction is completed as an example: Only include the letter of the account not the account name.** **Date** **Transaction** **AMOUNT** ---------- ------------- ------------------------------------------------- --------------- ------------- ***ex*** ***Feb 1*** ***Paid an Accounts Payable*** ***\$5,000*** 21 Feb 2 Purchased equipment with a note payable 60,000 22 Feb 7 Provided services to customers on account 25,000 23 Feb 14 Advertised in the local paper and paid cash 500 24 Feb 15 Recorded weekly salaries will be paid next week 15,000 25 Feb 20 Paid salaries recorded earlier 15,000 26 Feb 28 Provided services to customers for cash 20,000 Date Account Debit Credit ***ex*** ***FEB 1*** ***F Account payable (L-)*** ***5,000*** ***A Cash (A-)*** ***5,000*** 21. Feb 2 22. Feb 7 23. Feb 14 24. Feb 15 25. Feb 20 26. Feb 28 Cash ----------- ------------ BB 25,000 5,000 (ex) 27\. \$\_\_\_\_\_\_\_\_\_\_If January 31st cash was **\$25,000**, what is the cash balance at the end of the day on 2/28? (Use the T account to assist answering \#27) **\ Use the following to answer questions 28 -- 35** The company has provided their trial balance at the end of the year. **Debits** **Credits** -------------------------- ----------------------- ------------- Cash \$40,000 Accounts receivable 20,000 Supplies 1,000 Prepaid expenses 9,000 Buildings/Equipment, net 997,000 Accounts payable \$12,000 Income tax payable 8,000 Utilities payable 2,000 Deferred revenue 10,000 Notes payable 300,000 Common stock 375,000 Retained Earnings 290,000 Dividends 20,000 Service revenue 985,000 Salaries expense 620,000 Insurance expense 30,000 Advertising expense 125,000 Supplies expense 10,000 Depreciation expense 60,000 Rent expense 30,000 Utilities expense [20,000 ]   Totals \$1,982,000 \$1,982,000 Based on the data provided in the trial balance find the following: 28\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine Total expenses. 29\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine Net income 30\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine Beginning Retained Earnings 31\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine Ending Retained Earnings 32\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine Total Stockholders' Equity 33\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_Determine Total Liabilities 34\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_Determine Total Assets 35\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_At the beginning of the year, the company had **\$300,000** in its common stock account. How much stock was issued during the year? **Chapter 3 Homework** Submit your answers in Canvas before it is due **Use the following to answer questions 1 -- 4** A company maintains its records using accrual basis accounting; however, their accountant wants to create a statement of cash flows and needs to determine the cash flow from operating activities. For simplicity, we assume only one expense account (salaries). The following is data gathered from their records. Services provided to customers during the period \$700,000 -------------------------------------------------- ----------- Salaries expense for the period 450,000 Accounts receivable (beginning balance) 62,000 Accounts receivable (ending balance) 40,000 Salaries payable (beginning balance) 21,000 Salaries payable (ending balance) 16,000 Complete the T-accounts for ACCOUNTS RECEIVABLE and SALARIES PAYABLE to help answer questions \#1 &2. ***NOTE: All sERVICES PROVIDED are on account and salaries expense are recorded before they are paid.*** **Accounts Receivable salaries payable** -- -- -- -- -- -- -- -- -- -- 1. 2. 3. 4. **Use the following to answer questions 5 -- 11** **Determine the amount of revenue or expense to recognize in JANUARY for accrual basis and for cash basis (do not include negative signs). Use 0 (zero) if no revenue or expense should be recognized.** **Event** **Accrual basis** **Cash basis** -------- ------------------------------------------------------------------------------------------------------------ ------------------- ---------------- **5** The company paid \$900 on January 30 to rent a machine for February. **6** Paid \$400 for office supplies in January and used \$250 during the month. **7** The company borrowed \$100,000 from the bank and received cash in January. **8** Received \$700 in January from customers for services provided in December. **9** Paid workers \$10,000 in January (\$2,000 for work done in December and \$8,000 for work done in Janaury). **10** Provided \$12,000 of consulting services in January was paid in January. **11** Paid \$600 in January for December's electric bill. **Use the following to answer questions 12 - 13** On November 1^st^, the company received a **\$10,000** payment from a customer for services to be rendered evenly over the next **5** months. Deferred Revenue was credited on November 1^st^ and no other entries regarding this transaction were made until December 31st. 12. 13. **Use the following to answer questions 14 -- 15** On September 1^st^ the company borrows **\$500,000** from a local bank for **six** months. A note is signed with principal and **9%** interest to be paid when the note matures next year. A note payable was recognized on September 1^st^, and no other entries regarding this transaction were made until December 31st. 14. 15. Assets Liabilities Stockholders' Equity Revenue Expenses Net income -------- ------------- ---------------------- --------- ---------- ------------ **Use the following to answer questions 16 -- 17** The company incurs employee salaries of **\$25,000** for the last week of December, which will be paid on January 5th. 16. -- -- -- -- -- -- 17. **\ Use the following to answer questions 18 - 19** On November 1st, the company pays a local radio station **\$7,500** for 3 months of radio ads that are to be aired equally throughout the three months. Prepaid Advertising was debited on November 1st and no other entries regarding this transaction were made since then. 18. 19. **Use the following to answer questions 20 -- 26** The following are the year-end account balances (prior to closing) of the company: Cash \$40,000 -------------------------- ---------- Accounts Receivable 35,000 Supplies 1,000 Equipment 950,000 Accumulated depreciation 250,000 Accounts payable 22,000 Notes payable 150,000 Common stock 250,000 Retained earnings 254,000 Dividends 60,000 Service revenue 750,000 Salaries expense 395,000 Supplies expense 10,000 Rent expense 35,000 Depreciation expense 50,000 Miscellaneous expense 100,000 20\. \$\_\_\_\_\_\_\_\_\_\_\_Determine total expenses for the year 21\. \$\_\_\_\_\_\_\_\_\_\_\_Determine net income for the year 22\. \$\_\_\_\_\_\_\_\_\_\_\_ Determine ending retained earnings for the year 23\. \$\_\_\_\_\_\_\_\_\_\_\_ Determine ending total stockholders' equity for the year 24\. \$\_\_\_\_\_\_\_\_\_\_\_Determine total Current Assets at the end of the year 25\. \$\_\_\_\_\_\_\_\_\_\_\_Determine Total Assets at the end of the year 26\. Should Retained earnings be closed at year end? **\ Use the following to answer questions 27 -- 29** The Company had the following Net Income (Loss) for 20A -- 20D (the first four years of operations). Determine their Ending Retained Earnings amount for each year. (Keep your answer "in millions" like the example). +-------------+-------------+-------------+-------------+-------------+ | Year | [Net Income | [Dividends] | Ending | | | | or | {.underline | | | | | (Loss)]{.un | } | Retained | | | | derline} | | | | | | | | [Earnings]{ | | | | | |.underline} | | +-------------+-------------+-------------+-------------+-------------+ | | 20A | **\$0.95** | **\$0.05** | **\$0.90** | +-------------+-------------+-------------+-------------+-------------+ | 27. | 20B | \$1.10 | \$0.25 | | +-------------+-------------+-------------+-------------+-------------+ | 28. | 20C | \$1.25 | \$0.30 | | +-------------+-------------+-------------+-------------+-------------+ | 29. | 20D | \$1.20 | \$0.25 | | +-------------+-------------+-------------+-------------+-------------+ **Use the following to answer questions 30 -- 33** The following account balances appear in the 20XC year-end **POST-closing** trial balance of the company: Cash \$25,000 -------------------------- ---------- Accounts Receivable 30,000 Inventory 200,000 Equipment 600,000 Accumulated Depreciation 200,000 Accounts Payable 15,000 Notes Payable 300,000 Common stock 150,000 Retained earnings ? 30\. \$\_\_\_\_\_\_\_\_\_\_\_Determine the total amount of **debits** that would be shown on the post-closing trial balance 31\. \$\_\_\_\_\_\_\_\_\_\_\_Determine retained earnings that would be shown on the **post-closing trial balance** 32\. \$\_\_\_\_\_\_\_\_\_\_\_Determine total current assets 33\. \$\_\_\_\_\_\_\_\_\_\_\_ Determine the book value of the equipment**\ Use the following to answer questions 34 - 36** The year-end adjusted trial balance of the Corporation included the following account balances: Retained earnings \$195,000 ------------------- ----------- Service revenue 620,000 Salaries expense 375,000 Rent expense 45,000 Interest expense 10,000 Dividends 120,000 **Prepare the closing entries.** 34\. \$\_\_\_\_\_\_\_\_ In preparing the closing entries for the temporary accounts, how much should Retained earnings be credited? 35\. \$\_\_\_\_\_\_\_\_ In preparing the closing entries for the temporary accounts, how much should Retained earnings be debited? 36\. \$\_\_\_\_\_\_\_\_\_ After closing the accounts, what is the ending balance in Retained Earnings? **Use the following for questions 37-39** The company has provided their accounts in alphabetical order. Use these accounts to answer the following questions. Accounts payable \$20,000 -------------------------- ---------- Accounts Receivable 35,000 Accumulated depreciation 250,000 Cash 30,000 Common stock 200,000 Depreciation expense 25,000 Dividends 100,000 Equipment 800,000 Deferred revenue 35,000 Notes payable 250,000 Rent expense 25,000 Retained earnings 193,000 Salaries expense 420,000 Service revenue 700,000 Supplies 1,000 Supplies expense 12,000 37\. \$\_\_\_\_\_\_\_\_\_\_ Total current assets 38\. \$\_\_\_\_\_\_\_\_\_\_Book value of the equipment 39\. \$\_\_\_\_\_\_\_\_\_\_Net income **Chapter 4 Homework** Submit your answers in CANVAS before it is due **Use the following to answer questions 1 -- 4** Determine whether the firm reports each of the following items as part of cash, cash equivalents, or neither in the balance sheet. Item Cash, Cash equivalent, or neither ---- -------------------------------- ----------------------------------- 1 30-day US Treasury bills 2. Debit card sales 3 60-day Certificates of Deposit 4. Supplies **Use the following to answer questions 5 -- 8** Bank Reconciliation: Identify whether the item should be added or subtracted from the bank balance or the company balance. Use the number (1-4) for your response. For instance, if the amount should be added to bank statement balance you would input 1. 1\. Added to bank statement balance 2\. Subtracted from bank statement balance 3\. Added to company cash ledger balance 4\. Subtracted from company cash ledger balance Item \# --- ----------------------------------------- ---- 5 Note receivable collected by the bank 6 Company error, recorded a deposit twice 7 Interest earned 8 Deposits outstanding **Use the following to answer questions 9 -11** At the end of the month, the general ledger of the company shows a balance for cash of **\$10,000**. Cash receipts yet to be deposited into the checking account total **\$3,000**, while checks written by the company but not yet processed by the bank total **\$2,700**. The company's balance of cash does not reflect a NSF check of **\$300,** a service fee of **\$15** and interest earned of **\$10** and a customer's payment collected by the bank of **\$700**; however, these amounts are included in the balance of cash of **\$10,095** reported by the bank as of the end of the month. Answer the following based on the process of doing the bank reconciliation: 9\. \$\_\_\_\_\_\_\_\_Determine the **total amount** that is used to reconcile the Bank balance (include "--" if needed): 10\. \$\_\_\_\_\_\_\_Determine the **total amount** that is used to reconcile the Company cash balance (include "--" if needed) 11\. \$\_\_\_\_\_\_\_\_\_\_\_What is the balance in the company's cash account after the reconciliation? **Use the following to answer questions 12 -- 15** +-----------------+-----------------+-----------------+-----------------+ | | Transaction | Cash involved? | Type of **CASH | | | | | FLOW** | | | | (Yes or No) | | | | | | Operating, | | | | | Investing, | | | | | Financing, or | | | | | None\ | | | | | Use the first | | | | | letter (O, I, | | | | | F, N) | +=================+=================+=================+=================+ | 12. | Received cash | | | | | in advance from | | | | | customers | | | +-----------------+-----------------+-----------------+-----------------+ | 13. | Issued common | | | | | stock for cash | | | +-----------------+-----------------+-----------------+-----------------+ | 14. | Purchased land | | | | | and building | | | | | with cash | | | +-----------------+-----------------+-----------------+-----------------+ | 15. | Paid electric | | | | | bill for the | | | | | month | | | +-----------------+-----------------+-----------------+-----------------+ **Use the following to answer questions 16 -- 20** Determine the company's cash flows based on the following: Transaction Amount of Transaction --- ------------------------------------------------------------------------------------------------------- ----------------------- A Cash provided from long-term borrowing \$100,000 B Cash used to pay the bank for a loan due this month 10,000 C Cash provided from consulting customers 35,000 D Cash used for purchase of office supplies 500 E Cash used for payment of office rent 2,800 F Cash provided from sale of equipment that had been used in operations 3,000 G Cash used to pay office utilities 300 H Cash used for payment of employee salaries 24,000 I Cash used for purchase of office equipment 45,000 J Purchase of company vehicle **paying 10% cash** and signing a note payable for the remaining balance. 58,000 16\. \$\_\_\_\_\_\_\_\_\_\_\_Refer to transaction J, how much should be included in cash used from investing activities? 17\. \$\_\_\_\_\_\_\_\_\_\_\_Determine the net cash flows from operating activities (include "--" if needed) 18\. \$\_\_\_\_\_\_\_\_\_\_\_Determine the net cash flows from investing activities (include "--" if needed) 19\. \$\_\_\_\_\_\_\_\_\_\_\_Determine the net cash flows from financing activities (include "--" if needed) 20\. \$\_\_\_\_\_\_\_\_\_\_\_How much did cash change over the year? **\ Use the following to answer questions 21 - 25** The company\'s cash ledger reports the following for the end of the month\   Deposits Checks ---------------------------- ---------- -------- ------ -------- ---------- Date Amount No. Date Amount 3-Oct \$15,000 1151 4-Oct \$10,000 10-Oct 17,000 1152 6-Oct 2,000 17-Oct 16,000 1153 15-Oct 5,000 24-Oct 18,000 1154 16-Oct 6,800 Cash receipts 10/26 -10/27 12,000 1155 20-Oct 21,000   \$78,000 1156 22-Oct 3,000   1157 29-Oct 18,000 Balance on October 1 \$3,000 \$65,800 Receipts 78,000   Disbursements 65,800   Balance on October 31 \$15,200          Information from October\'s bank statement and company records reveals the following additional information: a. b. c. d. e. f. g. h. i. *Prepare a bank reconciliation for October 31st to assist answering the questions following:* 21\. \$\_\_\_\_\_\_\_\_\_\_\_Of the total checks written during the month, what amount should be deducted from the bank balance during reconciling the bank account? 22\. \$\_\_\_\_\_\_\_\_\_\_\_ Of the cash receipts, what amount should be added to the bank balance during reconciling the bank account? 23\. When performing the bank reconciliation, how should the company treat check 1154? A. add \$1,800 to the company cash ledger account. B. subtract \$1,800 from company cash ledger account. C. add \$1,800 to the bank statement balance. D. subtract \$1,800 from the bank statement balance. 24\. \$\_\_\_\_\_\_\_\_\_\_\_The total amount needed to reconcile the company cash account was: 25\. \$\_\_\_\_\_\_\_\_\_\_\_What is the company's cash balance after the reconciliation? **Use the following to answer questions 26 -- 32**  Below is a summary of all transactions of the company for the month. **Cash transactions** ------------------------------------------ ------------------------------- ---------- Cash collections from: Sale of used office furniture \$20,000 Borrowing from bank 150,000 Customers 85,000 Cash payments for: Employee salaries 60,000 Dividends to stockholders 100,000 Advertising expense 10,000 Utilities expense 1,000 Purchased office equipment 100,000 Office supplies 300 **Noncash Transactions** Issue note payable for vehicle \$75,000 Services to customers on account 20,000 Purchased land by signing a note payable 275,000 *\ *Prepare a statement of cash flows for the month, properly classifying each of the transactions into operating, investing, and financing activities. The cash balance at the beginning of the month was **\$30,000**.  26\. \$\_\_\_\_\_\_\_\_\_\_\_What is the amount of cash inflows from operating activities? 27\. \$\_\_\_\_\_\_\_\_\_\_\_What is the amount of cash outflows from operating activities? 28\. \$\_\_\_\_\_\_\_\_\_\_\_What is the Net Cash Flows from Operating Activities (if cash used, use "-")? 29\. \$\_\_\_\_\_\_\_\_\_\_\_What is the Net Cash Flows from Investing Activities (if cash used, use "-")? 30\. \$\_\_\_\_\_\_\_\_\_\_\_What is the Net Cash Flows from Financing Activities (if cash used, use "-")? 31\. \$\_\_\_\_\_\_\_\_\_\_\_How much did cash change (if decrease, use "-") 32\. \$\_\_\_\_\_\_\_\_\_\_\_What is the ending cash balance for the company? **Chapter 5 Homework** Submit your answers in CANVAS before it is due **Use the following to answer questions 1 -- 5** For the next few weeks, the company is offering a **25% trade discount** when providing services of **\$15,000** or more to its customers to encourage customers to buy more services. The company also offers 2/10, n30 on all credit sales. All credit sales are invoiced at the end of the month. The company provided the following services this month; **amounts are shown before trade discounts have been deducted**: - Provides \$15,000 services for Customer A--- on account--- pays within 10 days - Provides \$10,000 services for Customer B--- on account--- pays within 10 days - Provides \$20,000 services for Customer C--- on account--- pays within 30 days - Provides \$9,000 services for Customer D---received payment last month 1\. \$\_\_\_\_\_\_\_\_\_\_\_What amount of Service revenue should the company record for Customer A? 2\. \$\_\_\_\_\_\_\_\_\_\_\_What amount of Service revenue should the company record for Customer B? 3\. \$\_\_\_\_\_\_\_\_\_\_\_Customer B pays within 10 days; how much will they pay? 4\. \$\_\_\_\_\_\_\_\_\_\_\_Determine the monthly Service revenue for the company 5\. \$\_\_\_\_\_\_\_\_\_\_\_Determine the company's Net service revenue for the month **Use the following to answer questions 6 -- 7** The company reported the following amounts at the end of the year: Total sales \$825,000 -------------------------------------- ----------- Accounts receivable 65,000 Sales allowances 5,000 Allowance for Uncollectible accounts 3,000 Sales discounts 10,000 Sales returns 6,000 6\. \$\_\_\_\_\_\_\_\_\_\_\_Determine total contra revenues for the company 7\. \$\_\_\_\_\_\_\_\_\_\_\_Determine net sales for the company **Use the following to answer questions 8 -- 11** The following information pertains to the company for the month of November: Credit sales \$890,000 -------------------------------------- ----------- -------- Accounts payable 45,000 Accounts receivable 50,000 Allowance for Uncollectible accounts 400 credit Cash sales 320,000 The company uses the **percent of receivables** method and estimates it will not collect **6%** of accounts receivable. 8\. \$\_\_\_\_\_\_\_\_\_\_\_Determine the ending balance for the Allowance for Uncollectible Accounts 9\. \$\_\_\_\_\_\_\_\_\_\_\_Determine the appropriate amount to record for Bad Debt expense 10\. \$\_\_\_\_\_\_\_\_\_\_\_Assuming the Allowance for Uncollectible accounts had a **\$100** debit balance instead of the previous credit balance, determine the amount to record for Bad Debt expense 11\. \$\_\_\_\_\_\_\_\_\_\_\_After recording bad debt expense, the Net Accounts Receivable is: **Use the following to answer questions 12 -- 15** At December 31, the company reported accounts receivable of **\$75,000** and an allowance for uncollectible accounts of **\$500** (credit). An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be **5%** of accounts receivable. 12\. \$\_\_\_\_\_\_\_\_\_\_\_Estimate the amount of uncollectible receivables: 13\. \$\_\_\_\_\_\_\_\_\_\_\_When recording the adjusting entry for bad debt expense how much should Allowance for Uncollectible accounts be credited? 14\. On January 1, a customer's account balance of **\$100** is written off as uncollectible. Record the write-off. -- -- -- -- -- -- 15\. \$\_\_\_\_\_\_\_\_\_\_\_If Net Accounts receivable were **\$71,250** before the write-off, how much are Net Accounts receivable AFTER the write-off? **Use the following to answer questions 16 - 19** For each transaction indicate whether it should: A. increase, B. decrease, or C. no effect. Credit sales transaction cycle Assets Liabilities Stockholders’ equity Revenues Expenses 16. Provide services on account 17. Estimate uncollectible accounts 18. Write off accounts as uncollectible 19. Collect on account previously written off **Use the following to answer questions 20 -- 22** At the beginning of the year; the company's *allowance for uncollectible accounts* had a beginning balance of **\$4,500**. On January 22nd, the company wrote off the A/R from customer C for **\$150** 20\. Record the entry for write-off -- -- -- -- -- -- 21\. \$\_\_\_\_\_\_\_\_\_\_\_By the end of the year (December 31^st^); total accounts written off were **\$4,250** (including the write off for customer C). What is the balance in the *allowance for uncollectible accounts* after all the write-offs? 22\. \$\_\_\_\_\_\_\_\_\_\_\_How much did bad debt expense change when the company wrote off the accounts receivables? **Use the following to answer questions 23 -- 25** The company invested **\$100,000** on October 1, 20XA at 9**%** simple interest for **20 months**. 23\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_Determine interest revenue for 20XA 24\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Determine interest revenue for 20XB 25\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Determine interest revenue for 20XC **Use the following to answer questions 26 -- 27** The company invested **\$100,000** on November 1, 20XA at **6%** simple interest for **1 year**. 26\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_Determine interest revenue for 20XA 27\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Determine interest revenue for 20XB **Use the following to answer questions 28 -- 30** The company lent **\$100,000** on September 1, 20XA at **12%** simple interest for **24 months.** 28\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_Determine interest revenue for 20XA 29\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Determine interest revenue for 20XB 30\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Determine interest revenue for 20XC **Chapter 6 Homework** Submit your answers in CANVAS before it is due **Use the following to answer questions 1 -- 6** **Case 1** **Case 2** **Case 3** **Case 4** --------------------- ------------ ------------ ------------ ------------ Beginning inventory \$60,000 \$85,000 \$42,000 ? Ending inventory ? 44,000 62,000 55,000 Purchases 852,000 ? 769,000 833,000 Cost of goods sold 900,000 946,000 ? 815,000 1\. \$\_\_\_\_\_\_\_\_\_\_\_\_ For case 1, determine goods available for sale 2\. \$\_\_\_\_\_\_\_\_\_\_\_\_For case 1, determine ending inventory 3\. \$\_\_\_\_\_\_\_\_\_\_\_\_For case 2, determine goods available for sale 4\. \$\_\_\_\_\_\_\_\_\_\_\_\_ For case 2, determine Purchases 5\. \$\_\_\_\_\_\_\_\_\_\_\_\_For case 3, determine cost of goods sold 6\. \$\_\_\_\_\_\_\_\_\_\_\_\_ For case 4, determine beginning inventory **Use the following to answer questions 7 -- 17** During September, the company sells **493** watches for **\$270.00 each**. The company has the following inventory purchase transactions for September: Date Transaction \# of Units Unit cost Total Cost -------- --------------------- ------------- ----------- ------------ 1-Sep Beginning Inventory 75 \$147.00 \$11,025 4-Sep Purchase 300 \$150.00 45,000 24-Sep Purchase 125 \$152.00 19,000   500 \$75,025 7\. \$\_\_\_\_\_\_\_\_\_\_\_\_What were company's sales for the period? For **questions 8 - 10** assume the company uses **First-in, First-out (FIFO)** inventory valuation. 8\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_Calculate ending inventory (FIFO) 9\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_Calculate cost of goods sold (FIFO) 10\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_ Calculate gross profit (FIFO) For **questions 11 - 13** assume the company uses **Last-in, First-out (LIFO)** inventory valuation. 11\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_Calculate ending inventory (LIFO) 12\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_Calculate cost of goods sold (LIFO) 13\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_ Calculate gross profit (LIFO) For **questions 14 - 16** assume the company uses **Weighted Average cost** inventory valuation. 14\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_Calculate ending inventory (WA) 15\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_Calculate cost of goods sold (WA) 16\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_Calculate gross profit (WA) 17\. Based on the above, which method would show a larger net income number? (FIFO, LIFO or WA) **Use the following to answer questions 18 -- 21** The company begins the year with inventory costing **\$36,000** and ends the year with inventory costing **\$42,000**. During the year, the following amounts are recorded: Sales \$625,000 ---------------------------- ----------- Sales returns & allowances 12,000 Sales discounts 3,000 Purchases 375,000 Operating expenses 195,000 18\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_Net Sales 19\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_Calculate cost of goods sold 20\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_ Gross profit 21\. \_\_\_ \_\_\_. \_\_% Gross profit ratio (rounded to once decimal place) **\ Use the following to answer questions 22 -- 29** The company reports the following amounts in its December 31, 20XD income statement: Sales discounts \$3,000 Cost of goods sold \$525,000 ------------------- --------- --------------------------- ----------- Net sales 930,000 Salaries expense 200,000 Utilities expense 18,000 Advertising expense 55,000 Interest expense 4,000 Effective income tax rate 20% 22\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine Sales 23\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine gross profit 24\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine operating expenses 25\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine Income before income taxes (IBT) 26\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine Income tax expense 27\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine net income 28\. \_\_\_ \_\_\_.\_\_\_% Calculate the company's gross profit ratio (round to one decimal place). 29\. \_\_\_\_\_\_\_\_\_\_\_\_\_Comparing the company's common sized income statement with its competitor. The competitor's gross margin is 4**5.0%**, which company is doing better? **\ Use the following to answer questions 30 -- 35** **Find the missing amounts:**   **Case 1** **Case 2** **Case 3** ------------------- ------------ ------------ ------------ Net Sales \$888,000 \$777,000 ? COGS ? 412,000 450,000 Gross profit 420,000 ? 390,000 Operating expense 289,000 212,000 ? Operating income ? ? 125,000 30\. \$\_\_\_\_\_\_\_\_\_\_\_\_For case 1, determine cost of goods sold 31\. \$\_\_\_\_\_\_\_\_\_\_\_\_For case 1, determine operating income (include "-" if needed) 32\. \$\_\_\_\_\_\_\_\_\_\_\_\_For case 2, determine gross profit 33\. \$\_\_\_\_\_\_\_\_\_\_\_\_For case 2, determine operating income (include "-" if needed) 34\. \$\_\_\_\_\_\_\_\_\_\_\_\_For case 3, determine net sales 35\. \$\_\_\_\_\_\_\_\_\_\_\_\_For case 3, determine operating expense 36\. Inventory records for the company revealed the following: +-----------------+-----------------+-----------------+-----------------+ | Date | Transaction | Number | Unit | | | | | | | | | of Units | Cost | +=================+=================+=================+=================+ | Apr. 1 | Beginning | 30 | \$18.00 | | | inventory | | | +-----------------+-----------------+-----------------+-----------------+ | Apr. 4 | Purchase | 200 | \$19.00 | +-----------------+-----------------+-----------------+-----------------+ The company **sold 215** units of inventory during the month. Ending inventory assuming LIFO would be \$\_\_\_\_\_\_\_\_\_\_\_\_ 37\. Inventory records for the company revealed the following: +-----------------+-----------------+-----------------+-----------------+ | Date | Transaction | Number | Unit | | | | | | | | | of Units | Cost | +=================+=================+=================+=================+ | Mar. 1 | Beginning | 45 | \$32.00 | | | inventory | | | +-----------------+-----------------+-----------------+-----------------+ | Mar. 6 | Purchase | 325 | \$34.00 | +-----------------+-----------------+-----------------+-----------------+ | Mar. 23 | Purchase | 200 | \$35.00 | +-----------------+-----------------+-----------------+-----------------+ The company **sold 550** units of inventory during the month. Ending inventory assuming FIFO would be \$\_\_\_\_\_\_\_\_\_\_\_ 38\. Inventory records for the company revealed the following: +-----------------+-----------------+-----------------+-----------------+ | Date | Transaction | Number | Unit | | | | | | | | | of Units | Cost | +=================+=================+=================+=================+ | Mar. 1 | Beginning | 50 | \$36.00 | | | inventory | | | +-----------------+-----------------+-----------------+-----------------+ | Mar. 3 | Purchase | 250 | \$37.00 | +-----------------+-----------------+-----------------+-----------------+ | Mar. 23 | Purchase | 200 | \$38.00 | +-----------------+-----------------+-----------------+-----------------+ The company **sold 490** units of inventory during the month. Ending inventory assuming Weighted Average would be \$\_\_\_\_\_\_\_\_\_\_\_ **Use the following for questions 39 & 40** **The company provided the following data:** **Beginning inventory** \$35,000 ------------------------- ---------- **Purchases** 550,000 **Gross profit** 400,000 **Net sales** 980,000 **Sales** 990,000 **39. What was the company's ending inventory? \$\_\_\_\_\_\_\_\_\_** **40. What was the company's gross profit ratio (1 decimal place) \_\_ \_\_.\_\_ %** **Chapter 7 Homework** Submit your answers in CANVAS before it is due **Use the following to answer questions 1 -- 4** The company purchased land as a factory site. An old building on the property was demolished, and construction began on a new building. Costs incurred during the first year are listed below: Land purchased as a factory site \$600,000 ------------------------------------------------- ----------- Property taxes on land (past due for last year) 2,000 Property taxes on land (for the next year) 6,000 Title investigation of land 13,000 Architect fees (for new building) 25,000 Demolition of old building 22,000 Sale of salvaged materials 4,000 Building construction costs 2,500,000 Interest cost related to the construction 60,000 1\. \$\_\_\_\_\_\_\_\_\_\_How much of the "property taxes on the land for the next year" should be capitalized to the Land account? 2\. How should the "sale of salvaged materials" be recorded? A. As an added cost of the land 3\. \$\_\_\_\_\_\_\_\_\_\_\_What amount should be recorded to the Land account? 4\. \$\_\_\_\_\_\_\_\_\_\_\_What amount should be recorded to the Building account? **Use the following to answer questions 5 -- 15 (Straight Line, Double declining balance and Activity Based)** The company purchased a new semi-trailer truck for an acquisition cost of **\$300,000**. The company estimates the truck will have a residual value of **\$60,000** when they are done using it at the end of **5 years** or about **500,000** miles. Answer 5 -- 8 based on Straight line depreciation 5\. \$\_\_\_\_\_\_\_\_\_\_ Year 2 depreciation expense 6\. \$\_\_\_\_\_\_\_\_\_\_\_ Book value at the end of year 2 7\. \$\_\_\_\_\_\_\_\_\_\_\_\_ Accumulated depreciation for year 3 8\. \$\_\_\_\_\_\_\_\_\_\_\_\_Book value at the end of year 3 **Answer 9 -- 13 based on 180% Declining Balance** 9\. \$\_\_\_\_\_\_\_\_\_\_ Year 2 depreciation expense 10\. \$\_\_\_\_\_\_\_\_\_\_\_\_ Accumulated depreciation for year 2 11\. \$\_\_\_\_\_\_\_\_\_\_\_\_Book value at the end of year 2 12\. \$\_\_\_\_\_\_\_\_\_\_ Year 3 depreciation expense 13\. \$\_\_\_\_\_\_\_\_\_\_ Year 4 depreciation expense Answer 14 and 15 based on Activity based As stated above, the company purchased a new semi-trailer truck for an acquisition cost of **\$300,000**. The company estimates the truck will have a residual value of **\$60,000** when they are done driving it **500,000** miles. For the past three years the company used the truck as follows: **Year** **Activity (miles)** ---------- ---------------------- 1 104,000 2 95,000 3 103,000 Total 302,000 14\. Under activity based depreciation; what is the amount of depreciation expense they would have recorded for year 3? \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 15\. Under activity based depreciation; what is the book value at the end of year 3? \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 16\. \$\_\_\_\_\_\_\_\_\_\_\_ During the first two years, the company drove the truck **77,000** in year 1 and **82,000** miles in year 2, to deliver merchandise to its customers. The company originally purchased the truck for **\$127,000**. If the truck has an estimated life **of 5 years or 320,000 miles**, with an estimated residual value of **\$27,000**, what amount of **depreciation expense** should the company record in the second year using the **activity-based method**? 17\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_ The company purchased equipment at the beginning of Year 1 for **\$220,000**. In Years 1 -5, the company depreciated the asset on a **straight-line basis** with an estimated useful life of **8 years** and a **\$20,000** residual value. What is the **BOOK VALUE** of the equipment at the end of year 5? **Use the following to answer questions 18 -- 19** The company purchased equipment for **\$200,000** on January 1, year 1. The equipment is expected to have a **4-year** life, with a residual value of **\$30,000** at the end of its service life. 18\. \$\_\_\_\_\_\_\_\_\_\_\_ Using the **double declining balance** method, determine **book value** **at the end of year 2**. 19\. \$\_\_\_\_\_\_\_\_\_\_\_\_ Using the **straight-line method**, determine **book value** **at the end of year 2**. **Use the following to answer questions 20 - 22** The company is in the process of closing its operations. It sold its **5-year-old** Front-end loader for **\$95,000**. The loader originally cost **\$210,000** and had an estimated useful life of 8 **years** and an estimated residual value of **\$20,000**. The company uses straight-line depreciation for all equipment. 20\. \$\_\_\_\_\_\_\_\_\_\_\_Calculate the book value of the loader at the end of the **5th year**. 21\. \$\_\_\_\_\_\_\_\_\_\_\_What was the gain or loss on the sale of the loader at the end of the **5th** year; (if loss, put -- in front of your answer)? 22\. \$\_\_\_\_\_\_\_\_\_\_\_ Assume instead the company had originally estimated the Equipment had an estimated useful life of **10 years** instead of 8 years. What would be the gain or loss on the sale of the loader at the end of the 5^th^ year (if loss, put -- in front of your answer)? **\ ** **Use the following to answer questions 23 - 30** The company reported the following income statement results: Sales \$900,000 ---------------------------- ----------- Sales returns & allowances 10,000 Gross profit 418,300 Operating expense 250,300 Gain on sale of equipment 5,000 Net income 115,700 23\. \$\_\_\_\_\_\_\_\_\_\_\_\_Calculate Net sales 24\. \$\_\_\_\_\_\_\_\_\_\_\_\_ Calculate Cost of Goods Sold 25\. \$\_\_\_\_\_\_\_\_\_\_\_\_ Calculate operating income 26\. \$\_\_\_\_\_\_\_\_\_\_\_\_Calculate Income before Income tax (IBT) 27\. \$\_\_\_\_\_\_\_\_\_\_\_\_ Calculate income tax expense 28\. \_\_\_ \_\_\_%. Calculate the gross profit margin 29\. \_\_\_ \_\_\_%. Calculate the profit margin 30\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_Assume the company had a **\$5,000 LOSS** (instead of the **\$5,000** gain) on the sale of equipment, determine IBT. **Use the following to answer questions 31 -- 32** Last year the company had the following expenditures related to developing its trademark:   General advertising costs \$150,000 ---------------------------------------------------- ----------------------- Advertising specifically focused on trademark 25,000 Legal fees to register trademark 10,000 Legal fees for successful defense of new trademark [60,000 ] Total \$245,000 During your year-end review of the accounts related to intangibles, you discover that the company has capitalized all the above as costs of the trademark. Management contends that all the costs increase the value of the trademark and, therefore, should be capitalized. 31\. Which of the above costs should NOT be capitalized? 32\. \$\_\_\_\_\_\_\_\_\_\_\_ What is the total cost that should be capitalized to the trademark account? **Chapter 8 Homework** Submit *your* answers in CANVAS before it is due **Use the following to answer questions 1 -- 5** +-----------------------------------------------------------------------+ | **Reporting Method** | | | | A. Current Liability | | | | B. Long term liability | | | | C. Disclosure note only | | | | D. Not reported | +-----------------------------------------------------------------------+ Select the correct reporting method for each of the items listed below: 1\. \_\_\_\_\_ Bonds payable. 2\. \_\_\_\_\_ Unremitted FICA taxes withheld from employees' wages. 3\. \_\_\_\_\_ A contingent liability that is *probable* of occurring but *cannot be estimated*. 4\. \_\_\_\_\_ Sales taxes collected from customers. 5\. \_\_\_\_\_ Current portion of long-term debt. **Use the following to answer questions 6 -- 10** On **August 1, 2024**, the company borrowed **\$1,200,000** cash from the bank to expand operations. The company signs a 1 **year**, **8%** promissory note. The company's year-end is December 31. 6\. How was the loan classified on the company's December 31, 2024 balance sheet? A. Current liability B. Long term liability C. Note disclosure only D. Stockholders' Equity 7\. How was the loan classified on the company's December 31, 2024 statement of cash flow? A. Operating activity B. Investing activity C. Financing activity D. Not shown on the statement of cash flows 8\. \$\_\_\_\_\_\_\_\_\_ How much interest should be accrued on December 31, 2024 (assume no previous entry was recorded for interest on the loan)? 9\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_When the note is paid at maturity (**July 31, 2025**) how much cash is paid to the bank? 10\. \$\_\_\_\_\_\_\_\_\_ When the note is paid at maturity in the second accounting year, how much does net income decrease? **Use the following to answer questions 11 -- 13** On July 1st company borrows **\$250,000** by issuing a one-year note compounding annually. Interest is payable at maturity. 11\. \$\_\_\_\_\_\_\_\_\_\_\_Determine the amount of interest expense that should be recorded in a year-end adjusting entry assuming an **8%** interest rate and a fiscal year-end **September 30.** 12\. \$\_\_\_\_\_\_\_\_\_\_\_Determine the amount of interest expense that should be recorded in a year-end adjusting entry assuming a **7%** interest rate and a fiscal year-end **December 31**. 13\. \$\_\_\_\_\_\_\_\_\_\_\_Determine the amount of interest expense that should be recorded in a year-end adjusting entry assuming a **6%** interest rate and a fiscal year-end **March 31**. **Use the following to answer questions 14 -- 18** You have been working at a local distributor. Your bi-weekly salary is \$1,800. Your average income tax rate is **13%** plus FICA taxes at 7.65%. Your employer provides health insurance to you which costs your employer **\$350** per pay and costs you **\$30** per pay (assume this is after tax). Determine the following based on your pay (assume you have already made more than \$7,000 this year so that unemployment taxes do not apply). 14\. \$\_\_\_\_\_\_\_\_\_­­\_\_ How much will your employer withhold from your paycheck for **federal income taxes**? 15\. \$\_\_\_\_\_\_\_\_.\_\_\_\_ How much will your employer withhold from your paycheck **for FICA taxes**? 16\. \$\_\_\_\_\_\_\_\_\_\_.\_\_\_\_ How much will your employer direct deposit into your bank account for your pay? 17\. \$\_\_\_\_\_\_\_\_\_.\_\_\_What is your total cost to your employer for the bi-weekly pay period? 18\. \$\_\_ \_\_.\_\_ \_\_ If you work 80 hours bi-weekly, what is the average hourly cost to your employer for your services? (round to two decimal places) **Use the following to answer questions 19 -- 24** The following information is from the company's 12/31 balance sheet, listed in alphabetical order: Accounts payable \$15,000 \$225,000 --------------------- ---------- -- ----------- Accounts receivable 30,000 200,000 Automobiles, net 125,000 245,000 Bond payable 700,000 150,000 Buildings, net 950,000 30,000 Common stock 450,000 1,000 Cash 25,000 3,000 Income tax payable 18,000 491,000 Interest payable 9,000 1,000 19\. \$\_\_\_\_\_\_\_\_\_\_. How much are the current assets? 20\. \$\_\_\_\_\_\_\_\_\_\_. How much are the total assets? 21\. \$\_\_\_\_\_\_\_\_\_. How much are the current liabilities? 22\. \$\_\_\_\_\_\_\_\_\_. How much are the total liabilities? 23\. \$\_\_\_\_\_\_\_\_\_. How much is the total stockholders' equity? 24\. \_\_.\_\_ \_\_ What is the current ratio, (round to two decimal places)? **Use the following to answer questions 25 -- 27** You want a new car. At the dealership, you find a car that you like. The dealership gives you two payment options: 1\. Pay \$23,000 in cash for the car today...OR 25\. \$\_\_\_\_\_\_\_\_\_\_.\_\_ \_\_How much CASH (in total) will you end up paying if you choose to make monthly payments for the car? 26\. \$\_\_\_\_\_\_\_\_\_\_.\_\_ \_\_How much interest (in total) will you pay if you choose to make payments instead of paying cash for the car today? 27\. \$\_\_\_\_\_. \_\_ \_\_How much interest has accrued by the time the **first car payment** is due (round to two decimal places)? **Use the following to answer questions 28 - 33** The company reports the following income statement results: Sales \$877,000 ---------------------------- ----------- Operating expense 245,000 Net income 121,100 Sales returns & allowances 12,000 Gross profit 395,000 Interest revenue 5,000 28\. \$\_\_\_\_\_\_\_\_\_\_\_\_Calculate Net sales: 29\. \$\_\_\_\_\_\_\_\_\_\_\_\_Calculate Cost of Goods Sold 30\. \$\_\_\_\_\_\_\_\_\_\_\_\_Calculate operating income 31\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_Calculate Income before Income tax (IBT) 32\. \_\_\_ \_\_\_.\_\_\_%. Calculate the gross profit ratio (**round to one decimal place**) 33\. \_\_\_ \_\_\_%. Calculate the profit margin **TVM Homework** Submit your answers in CANVAS before it is due **USE BAII Plus Financial Calculator or the Factor Table found in Canvas Modules to solve the TVM questions.** **Use the following to answer questions 1 - 4 (round to nearest whole dollar)** An amount is invested today and will remain invested for the next **6 years**. Determine the amount the investment will accumulate over the **6-year period** based on the different compounding periods. **Investment amount today** **Interest rate** **Compounding** --- ----------------------------- ------------------- ----------------- A \$20,000 6.0% Annual B \$20,000 6.0% Semiannually C \$20,000 6.0% Quarterly D \$20,000 6.0% Monthly 1\. \$\_\_\_\_\_\_\_\_\_\_ Determine the accumulated investment amount for investment A for the **6-year period** (round to nearest dollar)? 2\. \$\_\_\_\_\_\_\_\_\_\_\_ Determine the accumulated investment amount for B for the **6-year period** (round to nearest dollar)? 3\. \$\_\_\_\_\_\_\_\_\_\_ Determine the accumulated investment amount for C for the **6-year period** (round to nearest dollar)? 4\. \$\_\_\_\_\_\_\_\_\_\_Determine the accumulated investment amount for D for the **6-year period** (round to nearest dollar)? Which investment yields a higher future value? A, B, C or D? **Use the following to answer questions 5 - 8 (round to nearest whole dollar)** The four actors below have just signed a contract to star in a comedy. Each person signs independent contracts with the following terms: **Contract amount** **How contract is paid** --------- --------------------- -------------------------- Actor 1 \$1,125,000 Lump sum in 3 years Actor 2 1,200,000 Lump sum in 4 years Actor 3 350,000 Every year for 3 years Actor 4 275,000 Every year for 4 years Assume an annual discount rate of **10%** (**compounded annually**). 5\. \$\_\_\_\_\_\_\_\_\_What is the value of Actor 1's contract today (round to nearest dollar)? 6\. \$\_\_\_\_\_\_\_\_\_ What is the value of Actor 2's contract today (round to nearest dollar)? 7\. \$\_\_\_\_\_\_\_\_\_ What is the value of Actor 3's contract today (round to nearest dollar)? 8\. \$\_\_\_\_\_\_\_\_\_ What is the value of Actor 4's contract today (round to nearest dollar)? 9\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_You would like to start saving for retirement. Assuming you are now **22 years** old and you want to retire at the **age of 60**, you have **38 years** to watch your investment grow. You decide to invest **\$300** at the end of each month for the **next 38 years (456 months). This investment will** earn **10%** per year into the future. Calculate your accumulated investment at the end of **38 years**. (Round to nearest whole dollar) 10\. \$\_\_\_\_\_\_\_\_\_You want to buy a \$33,000 car today, but you don't have the cash to buy it. The dealership is offering to loan you the money at 6% interest with payments made monthly for the next six years. If you choose to buy the car, what is your monthly car payment (**round to nearest dollar**)? 11\. \$\_\_\_\_\_\_\_\_\_You want to start saving now so you have cash to buy a \$33,000 car in six years. You can earn 6% interest on your monthly payments. How much must you save each month to achieve your \$33,000 goal in 6 years (**round to nearest dollar**)? 12\. \$\_\_\_\_\_\_\_\_\_ You decide to save \$500 every month for the next five years so you can start a small business. You are investing the money and can earn 12%. How much will you have saved by the end of the five years (**round to nearest dollar**)? 13\. \$\_\_\_\_\_\_\_\_\_You won \$50,000, after taxes have been taken out, from a scratch-off lottery ticket. You decide to invest the money, so you have a down payment for a home in 4 years. Your expected annual return is 10%; how much will you have for a down payment in 4 years (**round to nearest dollar)?** **Use the following to answer 14-18** You are planning on investing \$2,400 every year for the next 7 years. You can earn 9% on your investment. The following are your options for investing the money. Option Investment amount Frequency -------- ------------------- --------------- 1 \$200 Monthly 2 \$600 Quarterly 3 \$1,200 Semi-annually 4 \$2,400 Annually 14\. \$\_\_\_\_\_\_\_\_\_What is the value of your investment if you select option 1 (round to nearest dollar)? 15\. \$\_\_\_\_\_\_\_\_\_What is the value of your investment if you select option 2 (round to nearest dollar)? 16\. \$\_\_\_\_\_\_\_\_\_What is the value of your investment if you select option 3 (round to nearest dollar)? 17\. \$\_\_\_\_\_\_\_\_\_What is the value of your investment if you select option 4 (round to nearest dollar)? 18\. \_\_\_\_ Which of the above is your best investing option? **Use the following to answer 19 -- 20:** You are going to receive a \$25,000 scholarship at the end of 3 years for graduate school. 19\. \$\_\_\_\_\_\_\_\_\_ How much must the scholarship fund invest today so it has the money to pay you in 3 years if it can earn 8% compounded semi-annually (round to nearest dollar)? 20\. \$\_\_\_\_\_\_\_\_\_ How much must the scholarship fund invest today so it has the money to pay you in 3 years if it can earn 8% compounded quarterly (round to nearest dollar)? **Use the following to answer questions 21-25** The company reports the following amounts in its year-end income statement: Net sales \$920,000 \$480,000 --------------------------- ----------- -- ----------- Advertising expense 125,000 5,000 Utilities expense 25,000 200,000 Effective income tax rate 15% 1,000 21\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine gross profit 22\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine operating expenses 23\. \$\_\_\_\_\_\_\_\_\_\_\_\_Determine Income tax expense 24\. \_\_\_ \_\_\_.\_\_\_% Calculate the gross profit ratio (round to one decimal place). 25\. \_\_\_.\_\_\_% Calculate the profit margin (round to one decimal place). **Chapter 9 Homework** Submit your answers in CANVAS before it is due **USE THE PV Factor Tables (located in Canvas Module "FILES") or the TI BAII Plus Financial Calculator to answer the following questions relating to the time value of money.** **Use the following to answer questions 1 -- 3 (Round answers to the nearest dollar)** The company issues **10.4%,** 10-year bonds with a total face amount of **\$100,000**. The market interest rate for bonds of similar risk and maturity is **10.6%**. Interest is paid semi-annually. 1\. \$\_\_\_\_\_\_\_\_\_\_\_Determine the semi-annual interest payment for this bond 2\. \$\_\_\_\_\_\_\_\_\_\_\_ (rounded to nearest dollar). What is the issue price of the bond? 3\. \$\_\_\_\_\_\_\_\_\_\_\_(rounded to nearest dollar). What is the amount of the **discount**? **Use the following to answer questions 4 -- 7 (Round answers to the nearest dollar)** The company issues **9.0%**, 5-year bonds with a total face amount of **\$500,000**. The market interest rate for bonds of similar risk and maturity is **8.8%**. Interest is paid semi-annually. DO NOT ROUND YOUR ANSWERS UNTIL YOU FULLY COMPLETE THE PROBLEM SET (input your answers after you've completed the entire problem). 4\. \$\_\_\_\_\_\_\_\_\_\_\_ (rounded to nearest dollar). What is the issue price of the bond? 5\. \$\_\_\_\_\_\_\_\_\_\_\_ (rounded to nearest dollar). When the company records the first interest payment, how much will the company record for interest expense? 6\. \$\_\_\_\_\_\_\_\_\_\_\_ (rounded to nearest dollar). What is the bond liability (carrying amount) after the first interest payment? 7\. \$\_\_\_\_\_\_\_\_\_\_\_ (rounded to nearest dollar). When the company records the second interest payment, how much will the company record for interest expense? **Use the following to answer questions 8 -- 10 (Round answers to the nearest dollar)** The company issues **11.5%**, 10-year bonds with a total face amount of **\$100,000**. The market interest rate for bonds of similar risk and maturity is **11.5%**. Interest is paid semiannually. 8\. \$\_\_\_\_\_\_\_\_\_\_\_ What is the issue price of the bond? 9\. \$\_\_\_\_\_\_\_\_\_\_\_. When the company records the 2nd interest payment, how much will the company record for interest expense? 10\. \$\_\_\_\_\_\_\_\_\_\_\_. What is the bond liability (carrying amount) after the 2nd interest payment? **Use the following to answer questions 11 -- 15** The company issues **10.0%,** **15-year** bonds with a face amount of **\$300,000** for **\$302,294.91**. The market interest rate for bonds of similar risk and maturity is **9.9%**. Interest is paid annually. 11\. \$\_\_\_\_\_\_\_\_\_\_\_Determine the interest payment. 12\. \$\_\_\_\_\_\_\_\_\_\_\_\_ (rounded to nearest dollar). Determine interest expense for the first interest payment. 13\. What will happen to interest expense each interest payment? (Increase, decrease, remain constant) 14\. What will happen to the bond liability (carrying value) each interest payment? (Increase, decrease, remain constant). 15\. \$\_\_\_\_\_\_\_\_\_\_\_When the bond matures in 15 years after all the interest payments have been made, how much will the company pay bondholders? 16\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_(rounded to nearest dollar) A ten year bond issue with a face amount of \$100,000 bears interest at the rate of 9%. The current market rate of interest is 8.9%. Determine the issue price of this annual bond. 17\. Bond X and Bond Y are both issued by the same company. Each of the bonds has a face value of \$100,000 and each matures in 10 years. Bond X pays 8% interest while Bond Y pays 7% interest. The current market rate of interest is 7%. Which of the following is correct? 18\. Given the information below, which bond(s) will be issued at a premium? ----------------------- -------------------------- -------------------------- -------------------------- -------------------------- **[Bond 1]** **[Bond 2]** **[Bond 3]** **[Bond 4]** Stated Rate of Return 6% 4% 8% 7% Market Rate of Return 7% 3% 8% 5% ----------------------- -------------------------- -------------------------- -------------------------- -------------------------- 19\. \_\_\_\_\_% The company issues 9.2%, 10-year bonds with a face amount of \$1,000,000 on January 1, 20A for \$1,000,000. Interest is paid **semiannually** on June 30 and December 31. What was the market interest rate for the bond issuance? **\ ** **Use the following to answer questions 20 -- 24** On January 1, year 1, The company borrows \$48,500 to purchase a new vehicle by agreeing to a 6.0%, 6-year loan with the bank. Payments are due at the end of each month with the first installment (vehicle payment) due on January 31, year 1. **After completing the problem, ROUND YOUR ANSWERS TO THE NEAREST DOLLAR.** 20\. Determine the monthly vehicle payment (installment) \$\_\_\_\_\_\_\_\_\_ 21\. Determine the interest expense for the first car payment \$\_\_\_\_\_\_\_\_\_ 22\. How much of the payment will decrease the amount owed (principal)? \$\_\_\_\_\_\_\_\_\_\_\_ 23\. After the first vehicle payment is made the amount owed on the vehicle would be: \$\_\_\_\_\_\_\_\_\_\_\_\_ 24\. Determine interest expense for the second car payment \$\_\_\_\_\_\_\_\_\_ **Use the following to answer questions 25 -- 27** On January 1, year 1, the company borrows \$39,500 to purchase a new vehicle by agreeing to a 6%, 5-year note with the bank. Payments of \$763.65 are due at the end of each month with the first installment due on January 31, year 1. **ROUND YOUR ANSWERS TO THE NEAREST CENT (2 decimal places).** 25\. After the first car payment (installment) is made the amount owed on the vehicle would be: \$\_\_\_\_\_\_\_\_\_.\_\_ \_\_ 26\. Determine interest expense for the second car payment \$\_\_\_\_\_\_.\_\_ \_\_ 27\. How much does the company owe at the end after all payments have been made? \$\_\_\_\_\_\_\_\_ **REVIEW: Use the following to answer questions 28 -- 32** The company reports the following income statement results: Gross profit \$354,400 -------------------- ----------- Interest revenue 17,000 Sales discounts 10,000 Net Sales 800,000 Operating expense 280,000 Effective tax rate 10% 28\. \$\_\_\_\_\_\_\_\_\_\_\_\_Calculate Sales. 29\. \$\_\_\_\_\_\_\_\_\_\_\_\_Calculate Income before Income tax (IBT). 30\. \$\_\_\_\_\_\_\_\_\_\_\_\_Calculate net income. 31\. \_\_\_ \_\_\_.\_\_\_% Calculate the gross profit margin (one decimal place) 32.\_\_\_ \_\_\_. \_\_\_ \_\_\_ % Calculate the profit margin (round to two decimal places) **Chapter 10 Homework** Submit your answers in CANVAS before it is due **Match the following terms with their definitions (not every letter is used)** 1. Outstanding stock -- ---- ------------------- 2. Paid-in Capital 3. Retained earnings 4. Treasury stock 5. Issued stock **Use the following to answer questions 6 -- 12** The company has two classes of stock authorized: **\$100.00** par preferred and **\$0.01** par value common. As of the beginning of 20XC, **3,000** shares of preferred stock and **200,000** shares of common stock have been issued. Record the following transactions to complete the Statement of Stockholders' Equity: **Effect on Stockholders' Equity** -------- ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------ 1-Mar Issue **1,000** additional shares of preferred stock for **\$102.00** per share 1-Apr Issue **10,000** additional shares of common stock for **\$22** per share 1-Jun Declare a cash dividend on both common and preferred stock of **\$0.50** per share to all stockholders of record on June 15. 30-Jun Pay the cash dividend declared on June 1. 1-Aug Repurchase **25,000** shares of common treasury stock for **\$23.00** per share 1-Oct Reissue **15,000** shares of treasury stock purchased on August 1 for **\$25.00** per share 31-Dec Net income for the year was **\$375,000** The beginning balances are shown below. Complete the Statement of Stockholders' Equity using the above information: +---------+---------+---------+---------+---------+---------+---------+ | | Preferr | Common | Additio | Retaine | Treasur | Total | | | ed | Stock | nal | d | y | Stockho | | | Stock | | | Earning | Stock | lders\' | | | | | Paid-in | s | | Equity | | | | | Capital | | | | +=========+=========+=========+=========+=========+=========+=========+ | Beginni | \$300,0 | \$2,000 | \$2,998 | \$980,0 | \$0 | \$4,280 | | ng | 00 | | ,000 | 00 | | ,000 | | balance | | | | | | | | 20XC | | | | | | | +---------+---------+---------+---------+---------+---------+---------+ | Issuanc | | | | | | | | e | | | | | | | | of | | | | | | | | stock | | | | | | | +---------+---------+---------+---------+---------+---------+---------+ | Net | | | | | | | | income | | | | | | | | for the | | | | | | | | year | | | | | | | +---------+---------+---------+---------+---------+---------+---------+ | Less: | | | | | | | | Dividen | | | | | | | | ds | | | | | | | +---------+---------+---------+---------+---------+---------+---------+ | Purchas | | | | | | | | e | | | | | | | | of | | | | | | | | Treasur | | | | | | | | y | | | | | | | +---------+---------+---------+---------+---------+---------+---------+ | Sale of | | | | | | | | Treasur | | | | | | | | y | | | | | | | +---------+---------+---------+---------+---------+---------+---------+ | Ending | | | | | | | | balance | | | | | | | | 20XC | | | | | | | +---------+---------+---------+---------+---------+---------+---------+ Then answer the following questions: 6\. \$\_\_\_\_\_\_\_\_\_\_\_\_ When the shares were issued on March 1, how much did additional paid in capital increase? 7\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_On June 1^st^ when the dividend was declared, how much did retained earning decrease? 8\. \$\_\_\_\_\_\_\_\_\_\_ On August 1^st^ when the shares were repurchased, how much did stockholders' equity decrease? 9\. \$\_\_\_\_\_\_\_\_\_\_\_\_ On August 1^st^ when the shares were repurchased, how much did net income decrease? 10\. \$\_\_\_\_\_\_\_\_\_\_\_\_On October 1^st^ when the shares were reissued, how much did *additional paid in capital* change (if decrease put "-" in front of the number)? 11\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_Compute ending retained earnings on December 31^st^. 12\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_Compute ending stockholders equity on December 31^st^. **Use the following to answer questions 13 - 17** The company's management is considering either a 100% stock dividend or a 2-for-1 stock split. Complete the following chart to assist in answering the following: +-----------+-----------+-----------+-----------+-----------+-----------+ | | Before | | After | | After | | | | | 100% | | 2-for-1 | | | | | | | | | | | | Stock | | Stock | | | | | Dividend | | Split | +===========+===========+===========+===========+===========+===========+ | Common | \$40,000 | | | | | | stock, | | | | | | | \$0.20 | | | | | | | par value | | | | | | +-----------+-----------+-----------+-----------+-----------+-----------+ | Additiona | 1,260,000 | | | | | | l | | | | | | | paid-in | | | | | | | capital | | | | | | +-----------+-----------+-----------+-----------+-----------+-----------+ | Total | 1,300,000 | | | | | | paid-in | | | | | | | capital | | | | | | +-----------+-----------+-----------+-----------+-----------+-----------+ | Retained | 600,000 | | | | | | Earnings | | | | | | +-----------+-----------+-----------+-----------+-----------+-----------+ | Total | \$1,900,0 | | | | | | stockhold | 00 | | | | | | ers' | | | | | | | equity | | | | | | +-----------+-----------+-----------+-----------+-----------+-----------+ | | | | | | | +-----------+-----------+-----------+-----------+-----------+-----------+ | Shares | 100,000 | | | | | | outstandi | | | | | | | ng | | | | | | +-----------+-----------+-----------+-----------+-----------+-----------+ | Par value | \$0.40 | | | | | | per share | | | | | | +-----------+-----------+-----------+-----------+-----------+-----------+ | Share | \$160.00 | | | | | | price | | | | | | +-----------+-----------+-----------+-----------+-----------+-----------+ 13\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_ After the 100% stock dividend what amount is in Total paid-in capital account? 14\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_After the 100% stock dividend what amount is in the retained earnings account? 15\. \$\_\_\_\_.\_\_\_ \_\_\_After the 100% stock dividend what is the par value per share? 16\. \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_After the 2-for-1 stock split what amount is in Total paid in capital account? 17\. \$\_\_\_\_.\_\_\_ \_\_\_ After the 2-for-1 stock split what is the par value per share? **\ Use the following to answer questions 18 - 22** +-----------------------+-----------------------+-----------------------+ | The Company | | | | | | | | Balance Sheet | | | | | | | | (Stockholders' Equity | | | | Section) | | | | | | | | At December 31, 2025 | | | +=======================+=======================+=======================+ | Preferred stock, | | \$100,000 | | **\$100** par value | | | +-----------------------+-----------------------+-----------------------+ | Common stock, | | 125,000 | | **\$0.50** par value | | | +-----------------------+-----------------------+-----------------------+ | Additional Paid in | | [3,877,000 | | capital | | ] | +-----------------------+-----------------------+-----------------------+ | Total paid in capital | | 4,102,000 | +-----------------------+-----------------------+-----------------------+ | Retained earnings | | 900,000 | +-----------------------+-----------------------+-----------------------+ | Treasury stock | | [(420,000)]{.underlin | | | | e} | +-----------------------+-----------------------+-----------------------+ | Total stockholders\' | | \$4,582,000 | | equity | | | +-----------------------+-----------------------+-----------------------+ 18\. \_\_\_\_\_\_\_\_shares. How many shares of preferred stock have been issued? 19\. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_shares. How many shares of common stock have been issued? 20\. \$\_\_\_\_\_\_\_\_\_\_\_ If the common stock were issued at an average price of **\$16 per share**. What amount of the Additional Paid in capital is from the common stock issuance? 21\. \$\_\_\_\_\_\_\_\_\_\_\_If retained earnings at the beginning of the period was **\$654,000** and Net income was **\$312,000**, what were the declared dividends for the year? 22\. \_\_\_\_\_\_\_\_\_shares. If the treasury stock was reacquired at **\$21.00** per share, how many shares were reacquired? **Use the following to answer questions 23 - 26** The company was organized on January 3, 20XE. The firm was authorized to issue **1,000,000,000** shares of **\$1.00 par** common stock. During 20XE, the company had the following transactions relating to shareholders\' equity: **Per share** **Shares** **Total** ------------------------------- --------------- ------------ ----------- Issued common stock (January) \$19.00 500,000 Issued common stock (July) \$22.00 300,000 Outstanding shares 780,000