In: Accounting
On January 1, 2018, the general ledger of Grand Finale Fireworks includes the following account balances:
Accounts | Debit | Credit | ||||
Cash | $ | 43,500 | ||||
Accounts Receivable | 46,100 | |||||
Supplies | 8,300 | |||||
Equipment | 72,000 | |||||
Accumulated Depreciation | $ | 9,800 | ||||
Accounts Payable | 15,400 | |||||
Common Stock, $1 par value | 18,000 | |||||
Additional Paid-in Capital | 88,000 | |||||
Retained Earnings | 38,700 | |||||
Totals | $ | 169,900 | $ | 169,900 | ||
During January 2018, the following transactions occur: |
January 2 | Issue an additional 2,000 shares of $1 par value common stock for $40,000. |
January 9 | Provide services to customers on account, $16,800. |
January 10 | Purchase additional supplies on account, $5,700. |
January 12 | Repurchase 1,100 shares of treasury stock for $21 per share. |
January 15 | Pay cash on accounts payable, $17,300. |
January 21 | Provide services to customers for cash, $49,900. |
January 22 | Receive cash on accounts receivable, $17,400. |
January 29 |
Declare a cash dividend of $0.30 per share to all shares outstanding on January 29. The dividend is payable on February 15. |
(Hint: Grand Finale Fireworks had 18,000 shares outstanding on January 1, 2018 and dividends are not paid on treasury stock.) |
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January 30 | Reissue 900 shares of treasury stock for $23 per share. |
January 31 | Pay cash for salaries during January, $42,800. |
The following information is available on January 31, 2018.
1. Prepare a general journal for the above transactions and include the adjusting entry for utilities, supplies, depreciation, and income tax. Also include closing entries for revenue, expenses, and dividends.
2. Prepare an income statement and balance sheet as well.
3. and when finished complete the following analysis:
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Prepare journal entries as follows:
Date | General Journal | Debit | Credit |
Jan. 02 | Cash [2,000 shares × $20] | $40,000 | |
Common stock [2,000 shares × $1] | $2,000 | ||
Additional paid-in capital | $38,000 | ||
Jan. 09 | Accounts receivable | $16,800 | |
Service revenue | $16,800 | ||
Jan. 10 | Supplies | $5,700 | |
Accounts payable | $5,700 | ||
Jan. 12 | Treasury stock [1,100 shares × $21] | $23,100 | |
Cash | $23,100 | ||
Jan. 15 | Accounts payable | $17,300 | |
Cash | $17,300 | ||
Jan. 21 | Cash | $49,900 | |
Service revenue | $49,900 | ||
Jan. 22 | Cash | $17,400 | |
Accounts receivable | $17,400 | ||
Jan. 29 | Dividends | $5,670 | |
Dividends payable | $5,670 | ||
[18,000 + 2,000 - 1100] × $0.30 | |||
Jan. 30 | Cash [900 shares × $23] | $20,700 | |
Treasury stock [900 shares × $21] | $18,900 | ||
Additional paid-in capital | $1,800 | ||
Jan. 31 | Salaries Expense | $42,800 | |
Cash | $42,800 |
______________________________________________________________
Prepare Adjusting entries as follows:
Date | General Journal | Debit | Credit |
Jan. 31 | Utilities Expense | $7,000 | |
Utilities payable | $7,000 | ||
Jan. 31 | Supplies Expense | $8,100 | |
Supplies [$8300 + $5700 - $5900] | $8,100 | ||
Jan. 31 | Depreciation Expense | $1,700 | |
Accumulated depreciation | $1,700 | ||
[$72000 - $10800] ÷ 3 years] × 1/12 | |||
Jan. 31 | Income tax Expense | $2,800 | |
Income tax payable | $2,800 |
_______________________________________________________________________
Working notes:
Prepare Adjusted Trial Balance:
GRAND FINALE FIREWORKS | ||
Adjusted Trial Balance | ||
January. 31, 2018 | ||
Accounts | Debit | Credit |
Cash | $88,300 | |
Accounts Receivable | $45,500 | |
Supplies | $5,900 | |
Equipment | $72,000 | |
Accumulated depreciation [$9800 + $1700] | $11,500 | |
Accounts payable [$15400 +$5700 - $17300] | $3,800 | |
Common stock | $20,000 | |
Additional paid-in capital | $127,800 | |
Retained earnings | $38,700 | |
Service revenue [$16800 + $49900] | $66,700 | |
Treasury Stock | $4,200 | |
Dividends | $5,670 | |
Dividends payable | $5,670 | |
Salaries Expense | $42,800 | |
Utilities Expense | $7,000 | |
Supplies Expense | $8,100 | |
Depreciation Expense | $1,700 | |
Income tax expense | $2,800 | |
Utilities payable | $7,000 | |
Income tax payable | $2,800 | |
$283,970 | $283,970 |
________________________________________________________
Income Statement | ||
Revenue: | ||
Service revenue | $66,700 | |
Less: Expenses: | ||
Salaries Expense | $42,800 | |
Utilities Expense | $7,000 | |
Supplies Expense | $8,100 | |
Depreciation Expense | $1,700 | |
Income tax expense | $2,800 | $62,400 |
Net Income | $4,300 |
Kindly repost for other parts.
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