Accounting Question

Problem #1:  (15 points)

The following stockholders’ equity accounts, arranged alphabetically, are in the ledger of Southern Corporation at December 31, 2014.

         Common Stock ($5 stated value)                                     $2,200,000

         Paid-in Capital in Excess of Par—Preferred Stock              280,000

         Paid-in Capital in Excess of Stated Value—Common Stock 800,000

         Preferred Stock (8%, $100 par, noncumulative)                  500,000

         Retained Earnings                                                                1,334,000

         Treasury Stock—Common (10,000 shares)                         120,000

Instructions

Prepare the stockholders’ equity section of the balance sheet at December 31, 2014.

Problem #2:  (10 points)

The adjusted trial balance for Holly Corporation at the end of 2014 contained the following accounts:

            Bonds payable, 10%..............................................................          $700,000

            Interest payable.....................................................................              20,000

            Discount on bonds payable...................................................              40,000

            Lease liability..........................................................................              50,000

            Mortgage notes payable, 9%, due 2017................................              90,000

            Accounts payable..................................................................            120,000

Instructions

(a)    Prepare the long-term liabilities section of the balance sheet.

(b)    Indicate the proper balance sheet classification for the accounts listed above that do not belong in the long-term liabilities section.