Accounting problems

Problem 9-2A  Compare Three Depreciation Methods

Breyer Company purchased packaging equipment on January 3, 2010, for $101,250. The equipment was expected to have a useful life of three years, or 25,000 operating hours, and a residual value of $7,500. The equipment was used for 9,500 hours during 2010, 8,400 hours in 2011, and 7,100 hours in 2012.

Instructions:

1.  Determine the amount of depreciation expense for the years ended December 31, 2010, 2011, and 2012, by the Straight-Line Method, the Units-of-Production Method, and the Double-Declining-Balance Method. Also determine the total depreciation expense for the three years by each method.

Depreciation Expense

Year

Straight-Line Method

Units-of-Production Method

Double-Declining-Balance Method

2010

$

$

$

2011

$

$

$

2012

$

$

$

Total

$

$

$

2.  What method yields the highest depreciation expense for 2010?

The input in the box below will not be graded, but may be reviewed and considered by your instructor.

3.  What method yields the most depreciation over the three–year life of the equipment?

The input in the box below will not be graded, but may be reviewed and considered by your instructor.

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Journalize the transactions and the adjusting entries. If an amount box does not require an entry, leave it blank or enter "0".

 2010 Jan. 9 

 Mar. 17 

 Dec. 31 

 2011 Jan. 2 

 Aug. 1 Deprec. 

 Aug. 1 Sale 

 Sept. 23 

 Dec. 31 

 2012 July 1 

 Oct. 2 Deprec. 

 Oct. 2 Sale 

 Dec. 31 

Item

Impairment, Amortization or Depletion Expense

a.

$

b.

$

c.

$

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2.  Journalize the adjusting entries required to record the amortization, depletion, or impairment for each item.

 a 

 b. 

 c. 

(1)

$

(3)

$

(8)

$

(12)

$

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b.  Journalize the entry to record the payroll accrual. If an amount box does not require an entry, leave it blank or enter "0".

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c.  Journalize the entry to record the payment of the payroll.

Date

Account

Debit

Credit

Feb. 15

Select

Select

Mar. 17

Select

Select

May 1

Select

Select

Select

June 15

Select

Select

July 21

Select

Select

Select

Aug. 14

Select

Select

Select

Select

Sept. 13

Select

Select

Select

Sept. 19

Select

Select

Dec. 1

Select

Select

Select

Dec. 12

Select

Select

Dec. 31

Select

Select

Select

Item

Account

Debit

Credit

a.

Select

Select

b.

Select

Select

Customer

Due Date

Number of Days Past Due

Antelope Sports & Flies

June 21, 2011

 days

Big Hole Flies

Aug. 30, 2011

 days

Charlie's Fish Co.

Sept. 8, 2011

 days

Deschutes Sports

Oct. 20, 2011

 days

Green River Sports

Nov. 7, 2011

 days

Smith River Co.

Nov. 28, 2011

 days

Wild Trout Company

Dec. 5, 2011

 days

Wolfe Sports

Jan. 7, 2012

 days

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2.  Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals. If an amount box does not require an entry, leave it blank or enter "Zero".

 Aging of Receivables Schedule 

 December 31, 2011 

 Customer 

 Balance 

 Not Past Due 

 Days Past Due 1-30 

 Days Past Due 31-60 

 Days Past Due 61-90 

 Days Past Due 91-120 

 Days Past Due Over 120 

 AAA Fishery 

 20,000 

 20,000 

 Blue Ribbon Flies 

 7,500 

 Z Fish Co. 

 4,000 

 4,000 

 Subtotals 

 Ant. Sports and Flies 

 Big Hole Flies 

 Charlie's Fish Co. 

 Deschutes Sports 

 Green River Sports 

 Smith River Co. 

 Wild Trout Company 

 Wolfe Sports 

 Totals 

 Percent uncollectible (%) 

 1 %

 4 %

 8 %

 25 %

 45 %

 80 %

 Estimate of uncollectible accounts 

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4.  Assume that the allowance for doubtful accounts for Angler's Dream Company has a debit balance of $1,405 before adjustment on December 31, 2011. Journalize the adjusting entry for uncollectible accounts.

Hide

 Jan. 5 

 Feb. 4-sale 

 Feb. 4-cost 

 Feb. 13-sale 

 Feb. 13-cost 

 Mar. 6 

 Mar. 14 

 Apr. 5 

 May 5 

 May 13 

 July 12 

 Aug. 3 

 Sept. 7-sale 

 Sept. 7-cost 

 Sept. 17 

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 Jan. 5 

 Feb. 4-sale 

 Feb. 4-cost 

 Feb. 13-sale 

 Feb. 13-cost 

 Mar. 6 

 Mar. 14 

 Apr. 5 

 May 5 

 May 13 

 July 12 

 Aug. 3 

 Sept. 7-sale 

 Sept. 7-cost 

 Sept. 17 

Problem 11-1A  Dividends on Preferred and Common Stock

Love Theatre Inc. owns and operates movie theaters throughout New Mexico and Utah. Love Theatre has declared the following annual dividends over a six-year period: 2007, $16,000; 2008, $48,000; 2009, $65,000; 2010, $90,000; 2011, $115,000; and 2012, $140,000. During the entire period ending December 31 of each year, the outstanding stock of the company was composed of 25,000 shares of cumulative, 2% preferred stock, $80 par, and 100,000 shares of common stock, $4 par.

Instructions:

1.  Calculate the total dividends and the per-share dividends declared on each class of stock for each of the six years. There were no dividends in arrears on January 1, 2007. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".

Year

Total Dividends

Preferred Dividends

Common Dividends

Total

Per Share

Total

Per Share

2007

$   16,000

$

$

$

$

2008

48,000

2009

65,000

2010

90,000

2011

115,000

2012

140,000

$

$

2.  Calculate the average annual dividend per share for each class of stock for the six-year period. If required, round your answers to two decimal places.

Average annual dividend for preferred:

$

 per share

Average annual dividend for common:

$

 per share

3.  Assuming a market price per share of $128 for the preferred stock and $7.80 for the common stock, calculate the average annual percentage return on initial shareholders' investment, based on the average annual dividend per share for preferred stock and for common stock.

Round your answers to two decimal places.

Preferred stock:

 %

Common stock:

 %

Problem 11-4A  Entries for Selected Corporate Transactions

Tolbert Enterprises Inc. manufactures bathroom fixtures. The stockholders' equity accounts of Tolbert Enterprises Inc., with balances on January 1, 2012, are as follows: 

The following selected transactions occurred during the year:

1.  The January 1 balances have been entered in T accounts for the stockholders' equity accounts. Record the above transactions in the T accounts and provide the December 31 balance where appropriate.

Common Stock

Jan. 1 Bal.

4,000,000

Select

Select

Dec. 31 Bal.

Paid-In Capital in Excess of Stated Value

Jan. 1 Bal.

750,000

Select

Select

Dec. 31 Bal.

Retained Earnings

Select

Jan. 1 Bal.

9,150,000

Select

Dec. 31 Bal.

Treasury Stock

Jan. 1 Bal.

600,000

Select

Select

Dec. 31 Bal.

Paid-In Capital from Sale of Treasury Stock

Select

Stock Dividends Distributable

Select

Select

Stock Dividends

Select

Select

Cash Dividends

Select

Select

2. Journalize the entries to record the transactions. If an amount box does not require an entry, leave it blank or enter ("0").

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.

Date

Account

Debit

Credit

Jan. 4

Select

Select

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

Date

Account

Debit

Credit

Apr. 3

Select

Select

Select

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

Date

Account

Debit

Credit

June 6

Select

Select

Select

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.

Date

Account

Debit

Credit

July 1

Select

Select

Select

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

Date

Account

Debit

Credit

Aug. 15

Select

Select

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

Date

Account

Debit

Credit

Nov. 10

Select

Select

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

Date

Account

Debit

Credit

Dec. 27

Select

Select

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

Date

Account

Debit

Credit

Dec. 31

Select

Select

Dec. 31.  Closed the two dividends accounts to Retained Earnings.

Date

Account

Debit

Credit

Dec. 31

Select

Select

Select

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

Tolbert Enterprises Inc.  Retained Earnings Statement For the Year Ended December 31, 2012

Select

Select

Select

Select

Select

Select

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

Stockholders' Equity

Paid-in-capital:

Select

Select

Select

Total paid-in capital

Select

Total

Select

Total stockholders' equity