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C11-1 Financial Reporting of Depreciation, Write-off, Bond Issuance and Common Stock Issuance, Purchase, Reissuance, and Cash Dividends (Chapters 4, 8, 9, 10, and 11) [LO 4-2, 4-5, 8-2, 9-3, 10-3, 11-2, 11-3]
American Laser, Inc., reported the following account balances on January 1.
| | Debit | Credit |
| Accounts Receivable | $ | 5,000 | | | | |
| Accumulated Depreciation | | | | $ | 30,000 | |
| Additional Paid-in Capital | | | | | 90,000 | |
| Allowance for Doubtful Accounts | | | | | 2,000 | |
| Bonds Payable | | | | | 0 | |
| Buildings | | 247,000 | | | | |
| Cash | | 10,000 | | | | |
| Common Stock, 10,000 shares of $1 par | | | | | 10,000 | |
| Notes Payable (long-term) | | | | | 10,000 | |
| Retained Earnings | | | | | 120,000 | |
| Treasury Stock | | 0 | | | | |
| TOTALS | $ | 262,000 | | $ | 262,000 | |
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The company entered into the following transactions during the year.
| Jan. | | 15 | | Issued 5,000 shares of $1 par common stock for $50,000 cash. |
| Jan. | | 31 | | Collected $3,000 from customers on account. |
| Feb. | | 15 | | Reacquired 3,000 shares of $1 par common stock into treasury for $33,000 cash. |
| Mar. | | 15 | | Reissued 2,000 shares of treasury stock for $24,000 cash. |
| Aug. | | 15 | | Reissued 600 shares of treasury stock for $4,600 cash. |
| Sept. | | 15 | | Declared (but did not yet pay) a $1 cash dividend on each outstanding share of common stock. |
| Oct. | | 1 | | Issued 100, 10-year, $1,000 bonds, at a quoted bond price of 101. |
| Oct. | | 3 | | Wrote off a $2,000 balance due from a customer who went bankrupt. |
| Dec. | | 29 | | Recorded $230,000 of service revenue, all of which was collected in cash. |
| Dec. | | 30 | | Paid $200,000 cash for this years wages through December 31. Ignore payroll taxes and payroll deductions. |
| Dec. | | 31 | | Calculated $10,000 of depreciation for the year to be recorded. (Ignore accrual adjustments for interest and income taxes.) |
the amount of Retained earnings. At the end of the year, the adjusted net income was $20,000.
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the amount of Retained earnings. At the end of the year, the adjusted net income was $20,000.
UnadjustedAdjustedPost-closing
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| | | AMERICAN LASER, INC | | Classified Balance Sheet | | At December 31 | | Assets | | Current Assets | | | | $0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | Total Assets | $0 | | Liabilities | | Current Liabilities | | | Noncurrent Liabilities | | | | 0 | | | 0 | | | 0 | | Noncurrent Liabilities | | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | Stockholders' Equity | | | Stockholders' Equity | | | | 0 | | | 0 | | | 0 | | Total Liabilities and Stockholders' Equity | 0 | | Interest Receivable | | | Total | 0 | | | 0 | | | 0 | | Total Liabilities and Stockholders' Equity | $0 | |
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| | | AMERICAN LASER, INC | | Classified Balance Sheet | | At December 31 | | Assets | | Current Assets | | | | $0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | Total Assets | $0 | | Liabilities | | Current Liabilities | | | Noncurrent Liabilities | | | | 0 | | | 0 | | | 0 | | Noncurrent Liabilities | | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | Stockholders' Equity | | | Stockholders' Equity | | | | 0 | | | 0 | | | 0 | | Total Liabilities and Stockholders' Equity | 0 | | Interest Receivable | | | Total | 0 | | | 0 | | | 0 | | Total Liabilities and Stockholders' Equity | $0 | |
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