ACCT 001A Lecture Notes - Lecture 15: Underwriting, Financial Statement, Net Income
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I need help answering A, B, C and Dplease!
Instructions
(You may want to set up T accounts to determine endingbalances.)
(a) Prepare journal entries for thetransactions listed above and adjusting entries.
(b) Prepare a General Ledger usingthe following format:
Gerenal Ledger | ||||||||||||||
Cash | Accounts Receivable | Merchandise Inventory | Supplies | Equipment | ||||||||||
Date | Debit | Credit | Date | Debit | Credit | Date | Debit | Credit | Date | Debit | Credit | Date | Debit | Credit |
Accounts Payable | Salaries Payable | Income Tax Payable | Common Stock | Retained Earnings | ||||||||||
Date | Debit | Credit | Date | Debit | Credit | Date | Debit | Credit | Date | Debit | Credit | Date | Debit | Credit |
Sales | Sales Discounts | |||||||||||||
Date | Debit | Credit | Date | Debit | Credit | |||||||||
(c) Prepare an adjusted trial balanceat December 31, 2010.
Totals $671,350
(d) Closing Entries are againREQUIRED
Use the following information to complete A, B and C:
Hiatt Corporation's balance sheet at December 31, 2009, ispresented below.
HIATT CORPORATION
Balance Sheet
December 31, 2009
Cash $ 24,600 Accounts payable $ 25,600
Accounts receivable 45,500 Common stock ($10 par) 80,000
Allowance for doubtful accounts (1,500) Retained earnings127,400
$233,000
Supplies 4,400
Land 40,000
Building 142,000
Accumulated depreciation-building (22,000)
$233,000
During 2010, the following transactions occurred.
1. On January 1, 2010, Hiatt issued 1,500 shares of $20 par, 7%preferred stock for $33,000.
2. On January 1, 2010, Hiatt also issued 900 shares of the $10 parvalue common stock for $21,000.
3. Hiatt performed services for $280,000 on account.
4. On April 1, 2010, Hiatt collected fees of $36,000 in advance forservices to be performed from April 1, 2010, to March 31,2011.
5. Hiatt collected $267,000 from customers on account.
6. Hiatt bought $35,100 of supplies on account.
7. Hiatt paid $32,200 on accounts payable.
8. Hiatt reacquired 400 shares of its common stock on June 1, 2010,for $38 per share.
9. Paid other operating expenses of $188,200.
10. On December 31, 2010, Hiatt declared the annual preferred stockdividend and a $1.20 per share dividend on the outstanding commonstock, all payable on January 15, 2011.
11. An account receivable of $1,300 which originated in 2009 iswritten off as uncollectible.
Adjustment data:
1. A count of supplies indicates that $5,900 of supplies remainunused at year-end.
2. Recorded revenue earned from item 4 above.
3. The allowance for doubtful accounts should have a balance of$3,500 at year end.
4. Depreciation is recorded on the building on a straight-linebasis based on a 30-year life and a salvage value of $10,000.
5. The income tax rate is 30%. (Hint: Prepare the income statementup to income before taxes and multiply by 30% to compute theamount.)
Flush Mate Co. wholesales bathroom fixtures. During the current fiscal year, Flush Mate Co. received the following notes:
Date | Face Amount | Interest Rate | Term | |
---|---|---|---|---|
1. | Mar. 6 | $84,500 | 6% | 45 days |
2. | Apr. 23 | 21,700 | 9% | 60 days |
3. | July 20 | 43,900 | 5% | 120 days |
4. | Sept. 6 | 51,500 | 6% | 90 days |
5. | Nov. 29 | 30,600 | 5% | 60 days |
6. | Dec. 30 | 71,300 | 6% | 30 days |
Required: | |
1. | Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number. Assume a 360-day year when calculating interest.(Note: Round each interest computation to the whole dollar.) |
2. | Journalize the entry to record the dishonor A note receivable is dishonored when the maker of the note fails to pay the note on the due date. of Note (3) on its due date. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round your answer to the nearest whole dollar. |
3. | Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round your answer to the nearest whole dollar. |
4. | Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round your answer to the nearest whole dollar. |
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Chart of Accounts
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Flush Mate Co. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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none
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Starting Question
Shaded cells have feedback.
1. Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number. Assume a 360-day year when calculating interest. (Note: Round each interest computation to the whole dollar.)
Note | Due Date | Interest Due at Maturity |
---|---|---|
1. | selector 1Apr. 20 June 22 Apr. 21 Apr. 20 June 9 Apr. 30 | |
2. | selector 2June 22 July 22 June 23 June 22 July 25 June 30 | |
3. | selector 3Nov. 17 Dec. 5 Nov. 20 July 1 Nov. 17 July 31 | |
4. | selector 4Dec. 5 Dec. 4 Dec. 5 Oct. 31 Dec. 6 Dec. 1 | |
5. | selector 5Jan. 28 Sep. 29 Jan. 29 Jan. 28 Nov. 28 Nov. 17 | |
6. | selector 6Jan. 29 Nov. 28 Jan. 30 Jan. 29 Nov. 17 Jan. 28 |
Points:
12 / 12
Feedback
Check My Work
Count the number of days in each month until the total number of days is reached for the term of the note and this will be the due date. Interest is not charged on the first day of the note.
Explanation
none
X
Journal
Shaded cells have feedback.
2. Journalize the entry to record the dishonor
A note receivable is dishonored when the maker of the note fails to pay the note on the due date.
of Note (3) on its due date. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round your answer to the nearest whole dollar.How does grading work?
The grader is designed to give you the best score possible, even when you skip lines or enter them out of order. It does this by taking every line you have entered and comparing it to every line in the answer. When it finds the line that gives you the best score, it considers that a match.
PAGE 1
JOURNAL
ACCOUNTING EQUATION
Score: 37/37
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
---|---|---|---|---|---|---|---|---|
1 | â | â | â | â | ||||
2 | â | â | â | |||||
3 | â | â | â |
Solution
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
---|---|---|---|---|---|---|---|---|
1 | ||||||||
2 | ||||||||
3 |
Points:
7 / 7
3. Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round your answer to the nearest whole dollar.
How does grading work?
The grader is designed to give you the best score possible, even when you skip lines or enter them out of order. It does this by taking every line you have entered and comparing it to every line in the answer. When it finds the line that gives you the best score, it considers that a match.
PAGE 1
JOURNAL
ACCOUNTING EQUATION
Score: 21/25
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
---|---|---|---|---|---|---|---|---|
1 | â | â | â | |||||
2 | â | â |
Solution
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
---|---|---|---|---|---|---|---|---|
1 | ||||||||
2 |
Points:
4.2 / 5
4. Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year when calculating interest. Round your answer to the nearest whole dollar.
All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback.
PAGE 1
JOURNAL
ACCOUNTING EQUATION
Score: 2/99
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
---|---|---|---|---|---|---|---|---|
1 | ||||||||
2 | ||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
8 |
Solution
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
---|---|---|---|---|---|---|---|---|
1 | ||||||||
2 | ||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 | ||||||||
8 |
Points:
0.36 / 18
Feedback
Check My Work
2.
Typically, the maker of a dishonored note fails to pay the note on the due date. A company that holds a dishonored note transfers the face amount of the note plus any interest due back to an accounts receivable account. Interest revenue is not dependent on receiving the interest at this point.
3.
(Note 5) Calculate the number of days of interest that accrues between November 29 and December 31. Remember interest is not charged on the first day of the note. Use this to calculate:
(a) Interest rate x face amount = annual interest.
(b) Annual interest x (number of days to end of year ÷ 360 days) = interest on note to the end of the year
Two accounts related to interest are used for the transaction.
(Note 6) Calculate the number of days of interest that accrues between December 30 and December 31. Remember interest is not charged on the first day of the note. Use this to calculate:
(a) Interest rate x face amount = annual interest.
(b) Annual interest x (number of days to end of year ÷ 360 days) = interest on note to the end of the year
Two accounts related to interest are used for the transaction.
4.
Cash received will include the maturity value of the note.
Explanation
1
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Need help with part 3 and 4 please.
Klean Kars, which began operations in October, is enjoyingcontinuing success. The November 30, 2011 unadjusted trial balanceis as follows:
Acct No | Acct Title | Debit | Credit |
25 | Cash | 38264 | |
106 | Accounte receivable | 12618 | |
126 | Cleaning supplies | 2545 | |
128 | Prepaid insurance | 2220 | |
131 | Prepaid rent | 3300 | |
163 | Office equipment | 8000 | |
164 | Accum. Dep - Office equip | 0 | |
167 | Computer equip | 20000 | |
168 | Accum. Dep - Computerequip. | 0 | |
201 | Accounts Payable | 0 | |
210 | Wages payable | 0 | |
236 | Unearned Services Revenue | 0 | |
301 | Common stock | 44850 | |
302 | Retained earnings | 22300 | |
403 | Services revenue | 25659 | |
612 | Depreciation expense - OfficeEquip | 0 | |
613 | Depreciation expense -Computer Equip | 0 | |
623 | Wages expense | 2625 | |
637 | Insurance expense | 0 | |
640 | Rent expense | 0 | |
655 | Advertising expense | 1728 | |
676 | Mileage expense | 704 | |
684 | Repairs Expense -Computer | 805 |
I
Klean Kars had the following transactions and events in December2011
2-Dec Paid $1,025 cash to Hillside Mall for Klean Kars share ofmall advertising costs
3-DecPaid $500 cash for minor repairs to company's computer
4-Dec Received $3,950 cash from Jane Smith for a receivablerecorded in November
10-Dec Paid cash to Lyn Addie for 6 days of work at the rate of$125 per day. Ignore associated payroll taxes
14-Dec Contacted by James Johnson, who indicated Klean Karswould be hired to perform $7,000 worth of cleaning services overthe next 6 months.
14-Dec J. Johnson paid a $1,500 cash advance to Klean Kars andthe project is expected to begin on January 15, 2012
15-Dec Purchased $1,100 of cleaning supplies on credit fromHarris Office Products
16-Dec Sent a reminder to Suzy Solomon to pay the fee forservices recorded on November 8
20-Dec Started and completed a cleaning project for LiuCorporation and received $5,625 cash
28-Dec Received $3,000 cash from Suzy Solomon on her accountsreceivable
31-Dec Reimbursed an employee for business automobile mileage -600 total miles at a rate of $.50 per mile
The following additional facts are collected for use in makingadjusting entries prior to preparing financial
The December 31 inventory count of cleaning supplies shows $580still available
On October 1, 2011, Klean Kars paid their annual insurancepremium in the amount of $2,220, which
As of December 31, Lyn Addie has not been paid for 4 days ofwork at $125 per day
Record depreciation expense for the company's computer in theamount of $1200
Record depreciation expense for the company's office equipmentin the amount of $800
On October 1, 2011, Klean Kars signed a 2 year lease agreement,which had the following terms:
** $825 per month ** First 4 months rent due at time of signing(October 1, 2011). ** Payments will be made monthly startingFebruary 1, 2012.
Required:
Record and post the necessary closing entries for Klean Kars
Prepare a Post-closing trial balance as of December 31, 2011
Can anyone help with These last two steps?