Exercise and Problems (financial accounting)

Relax! Stop worrying about deadlines and let our professional writers help you. Hire an essay writer helper and receive a professional assignment before your deadline. We provide writing services for all types of academic assignments.


Order a Similar Paper Order a Different Paper

Complete problems below (4 in total) submit as Excel Worksheet.

Problem #1 — Issuing stock

Bellvue Products Inc., a wholesaler of office products, was organized
on January 30 of the current year, with an authorization of 80,000 shares of 2%
preferred stock, $75 par and 800,000 shares of $20 par common stock. The
following selected transactions were completed during the first year of
operations:

Jan. 30.   Issued
300,000 shares of common stock at par for cash.

31.   Issued
750 shares of common stock at par to an attorney in payment of legal fees for
organizing the corporation.

Feb. 21.   Issued
32,000 shares of common stock in exchange for land, buildings, and equipment
with fair market prices of $150,000, $460,000, and $90,000, respectively.

Mar. 2.   Issued
15,000 shares of preferred stock at $77.50 for cash. Journalize the
transactions.

Journalize the entries to record the transactions.

Problem #2 – Treasury stock transactions

Tom’s Lawn Equipment Inc. develops and produces spraying equipment for
lawn maintenance and industrial uses. On June 19 of the current year, Tom’s
Lawn Equipment Inc. reacquired 24,000 shares of its common stock at $64 per
share. On August 30, 19,000 of the reacquired shares were sold at $68 per
share, and on September 6, 3,000 of the reacquired shares were sold at $70.

a. Journalize
the transactions of June 19, August 30, and September 6.

b. What is
the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of
the current year?

c. What is
the balance in Treasury Stock on December 31 of the current year?

d. How will
the balance in Treasury Stock be reported on the balance sheet?


Problem #3 — Entries for selected corporate transactions

Bath ‘n More Inc. manufactures bathroom fixtures. The stockholders’
equity accounts of Bath ‘n More Inc., with balances on January 1, 2012, are as
follows:

Common Stock, $10 stated value (600,000 shares
authorized, 400,000 shares issued) $4,000,000

Paid-In Capital in Excess of Stated Value   750,000

Retained Earnings   9,150,000

Treasury Stock (40,000 shares, at cost)   600,000

The following selected transactions occurred during the year:

Jan.
4.   Paid cash dividends of $0.13 per
share on the common stock. The dividend had been properly recorded when
declared on December 1 of the preceding fiscal year for $46,800.

Apr.
3.   Issued 75,000 shares of common
stock for $1,200,000.

June
6.   Sold all of the treasury stock for
$725,000.

July
1.   Declared a 4% stock dividend on
common stock, to be capitalized at the market price of the stock, which is $18
per share.

Aug.
15.   Issued the certificates for the
dividend declared on July 1.

Nov.
10.   Purchased 25,000 shares of treasury
stock for $500,000.

Dec.
27.   Declared a $0.16-per-share dividend
on common stock.

31.
  Closed the credit balance of
the income summary account, $950,000.

31.
  Closed the two dividends
accounts to Retained Earnings.

Instructions

1. 
Enter the January 1 balances in T accounts for
the stockholders’ equity accounts listed. Also prepare T accounts for the
following: Paid-In Capital from Sale of Treasury Stock; Stock Dividends
Distributable; Stock Dividends; Cash Dividends.

2. 
Journalize the entries to record the
transactions, and post to the eight selected accounts.

3. 
Prepare a retained earnings statement for the
year ended December 31, 2012.

4. 
Prepare the Stockholders’ Equity section of the
December 31, 2012, balance sheet.


Problem #4 – Stock and Debt Investments

in  In
January 2011, the management of Acme Company concludes that it has sufficient

cash to permit some
short-term investments in debt and stock securities. During the year, the

following transactions
occurred.

Feb. 1   Purchased 600 shares of Hershey common
stock for $31,800, plus brokerage fees of $600.

Mar. 1   Purchased 800 shares of Praters common
stock for $20,000, plus brokerage fees of $400.

Apr. 1   Purchased 50 $1,000, 7% Ralls bonds for
$50,000, plus $1,000 brokerage fees. Interest is payable semiannually on April
1 and October 1.

July 1   Received a cash dividend of $0.60 per
share on the Hershey common stock.

Aug. 1   Sold 200 shares of Hershey common stock at
$58 per share less brokerage fees of $200.

Sept. 1   Received a $1 per share cash dividend on
the Praters common stock.

Oct. 1   Received the semiannual interest on the
Ralls bonds.

Oct. 1   Sold the Ralls bonds for $50,000 less
$1,000 brokerage fees.

At December 31, the fair
value of the Hershey common stock was $55 per share. The fair value of

the Praters common stock
was $24 per share.

Instructions

(a)
Journalize the transactions shown on page 599 and
post to the accounts Debt Investments and Stock Investments. (Use the T-account
form.)

(b)
Prepare the adjusting entry at December 31, 2011, to report the
investment securities at fair value.  All
securities are considered to be trading securities.

(c)
Show the balance sheet presentation of investment securities at
December 31, 2011.

(d) Identify the income statement accounts and
give the statement classification of each account.

Great students hand in great papers. Order our essay service if you want to meet all the deadlines on time and get top grades. Professional custom writing is the choice of goal-focused students. Word on the online streets is... we're simply the best!

Get a 15% discount on your order using the following coupon code SAVE15


Order a Similar Paper Order a Different Paper