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On January 1, 2021, the general ledger of Grand Finale Fireworks includes the following account balances:...

On January 1, 2021, the general ledger of Grand Finale Fireworks includes the following account balances:

Accounts Debit Credit Cash $ 44,300

Accounts Receivable 47,700

Supplies 9,100

Equipment 80,000

Accumulated Depreciation $ 10,600

Accounts Payable 16,200

Common Stock, $1 par value 16,000

Additional Paid-in Capital 96,000

Retained Earnings 42,300

Totals $ 181,100

During January 2021, 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, $18,800. January 10 Purchase additional supplies on account, $6,500. January 12 Purchase 1,100 shares of treasury stock for $19 per share. January 15 Pay cash on accounts payable, $18,100. January 21 Provide services to customers for cash, $50,700. January 22 Receive cash on accounts receivable, $18,200. January 29 Declare a cash dividend of $0.20 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hint: Grand Finale Fireworks had 16,000 shares outstanding on January 1, 2021, and dividends are not paid on treasury stock.) January 30 Resell 700 shares of treasury stock for $21 per share. January 31 Pay cash for salaries during January, $43,600. The following information is available on January 31, 2021. Unpaid utilities for the month of January are $7,800. Supplies at the end of January total $6,700. Depreciation on the equipment for the month of January is calculated using the straightline method. At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $11,600. (Hint: Start with the cost of the Equipment shown at the top.) Accrued income taxes at the end of January are $2,700.

Question: Record the declaration of a cash dividend of $0.20 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hint: Grand Finale Fireworks had 16,000 shares outstanding on January 1, 2018 and dividends are not paid on treasury stock.)

Solutions

Expert Solution

Account Debit Credit
jan 2 cash 40000
common stock 2000
additional paid in capital 38000
jan 9 accounts recivables 18800
service revenue 18800
jan 10 supplies 6500
accounts payable 6500
jan 12 treasury stock [1100*19] 20900
cash 20900
jan 15 accounts payable 18100
cash 18100
jan 21 cash 50700
service revenue 50700
jan 22 cash 18200
accounts receivables 18200
jan 29 dividends [16000+2000-1100]*0.20 3380
dividends payable 3380
jan 30 cash [700*21] 14700
treasury stock [700*19] 13300
additional paid in capital 1400
jan 31 salaries expense 43600
cash 43600
jan 31 utilies expense 7800
utilities payable 7800
jan 31 supplies expense [9100+6500-6700] 8900
supplies 8900
jan 31 depreciation expense [80000-11600]/3*1/12 1900
accumulated depreciation 1900
jan 31 income tax expense 2700
income tax payable 2700

ekkarill92 answered 1 year ago
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