70.2K

Verified Solution

Link Copied!

part 1 : Record the following journal entries for ABC corporation on the journal and provided input form.

part 1. Journal

part 1. income statement

part 2

Journal Entries A. Issued 4000 shares of $10 par common stock at $11, receiving cash. B. Issued $80000 of 10 year 10% bonds at a market (effective) interest rate of 9%, with interest payable semiannually. Use the Present Value Tables in Appendix A of text book. Round all calculations to the nearest dollar. C. Declared a dividend of $0.25 per share on common stock. On date of declaration, 12800 shares of common stock were outstanding D. Paid cash dividend from (c) above. E. Purchased 4800 shares of Jones Company for $10 per share, plus $2400 commission. Our company purchased less than 20% of the outstanding stock of Jones Company. F. Declared a 5% stock dividend on the $10 par common stock when the market price was $25 per share. There were 12800 Shares outstanding G. Distributed the stock dividends declared in (F). H. Purchased $5000 of 5% bonds at par. Interest is payable semiannually. 1. Purchased 240 shares of treasury common stock for $12 per share. J. Received semiannual interest from bonds purchased in (H). K. Received a total cash dividend of $480 from Jones Company. L. Received a $800 dividend from our investment in Masco Company stock. This investment is accounted for under the equity method. M. Sold, at $17 per share, 120 shares of treasury common stock purchased in (1) N. Sold 960 shares of Jones company stock purchased in (E) for $13 per share, including commission. O. Masco Company's total earnings are $40000. We own 40%. Record the earnings for our company using the equity method. P. Sold the bonds purchased in (H) at 103 plus $63 in accrued interest. Q. At the end of the accounting period, the remaining shares of Jones Company stock increased $2.00 per share R. Record the payment of semiannual interest on the bonds issued in (B) and the amortization of the premium for six months. The amortization is determined using the straight-line method. Round all calculations to the nearest dollar. (6 points) (6 points) (3 points) (2 points) (3 points) (6 points) (2 points) (3 points) (3 points) (3 points) (3 points) (3 points) (6 points) (6 points) (3 points) (8 points) (3 Points) (6 points) Financial Accounting Name 150 points total Journal Entries 2-8 points each (75 points) Page 3 ABC Corporation, Inc. Income Statement For the Year Ended December 31, 20X1 (27 points) Page 2 Part 2 Instructions: The balances listed below are for December 31 and already include the journal entries you just prepared except for the stockholders' equity accounts. The balances listed for the stockholders' equity accounts are the January 1 balances. You will need to utilize the journal entries you just prepared to complete the Statement of Stockholders' Equity. Prepare a multistep income statement, a statement of stockholders' equity, and a classified balance sheet in good form for the year ended December 31, 20X1. Use the Student Input Form (Excel File) to complete the Financial Statements Credit Debit 240,000 Cash Accounts receivable 159,000 Allowance for doubtful accounts Equity Investments at cost 40,000 Valuation allowance for Equity Investments 16,000 Merchandise inventory at lower of cost (FIFO) or market Prepaid expenses 2,400 Interest receivable 1,600 Investment in Masco Company stock 12,000 Store buildings and equipment 244,000 Accumulated depreciation-store buildings and equipment Accounts payable Income tax payable Bonds payable, 10%, due in 10 years Premium on bonds payable Retained earnings, January 1, 20X1 Cash dividends, January 1, 20X1 balance Stock Dividends, January 1, 20X1 balance Common stock, $10 par (100,000 shares authorized; 8800 shares outstanding), January 1, 20X1 Paid-in capital in excess of par-common stock, January 1, 20X1 Paid-in capital from sale of treasury stock, January 1, 20X1 Treasury stock, January 1, 20X1 Sales Gain from sale of investment Unrealized gain(loss) on Equity Investments Dividend revenue Interest revenue Income of Masco Company Cost of goods sold Advertising expense Depreciation expense-store buildings and equipment Miscellaneous selling expenses Sales commissions Office rent expense Office salaries expense Miscellaneous administrative expenses Interest expense Income tax expense 0 320,000 $8,000 5,600 4,000 16,000 40,000 48,000 800 4,000 32,000 0 0 8,000 4,000 120,000 68,920 2,000 80,000 4,000 182,440 88,000 8,800 0 560,000 800 7,680 640 2,160 16.000 Statement of Stockholders' Equity For the Year Ended December 31, 20X1 Common Stock Balances, January 1 Issued common stock Net income Cash dividends Stock dividends Sale of treasury stock Purchase of treasruy stock Balances December 31 Paid-in Capital in Excess of Par- Common Stock (12 points) Paid-in Capital Retained Earnings Treasury Stock from sale of Treasury Stock 0 0 Total Balance Sheet December 31, 20X1 Assets Liabilities Stockholders' Equity (36 points)

Answer & Explanation Solved by verified expert

See Answer