Please see attached file for answers

Part A (15 points each for a possible total of 30 points)

1. After several years of business, Abel, Barney, and Cole are liquidating. The following are post-closing account balances.

Cash                      18,000

Inventory               73,000

Other assets          157,000

          Accounts Payable           61,000

          Abel, Capital                   50,000

          Barney, Capital               50,000

          Cole, Capital                   87,000

Non-cash assets are sold for $275,000. Profits and losses are shared equally.

After all liabilities are paid, divide the remaining cash amongst the partners. 

2. The partnership of Brandon and Ryan is being liquidated. All gains and losses are shared in a 3:1 ratio, respectively. Before liquidation, their balance sheet balances are as follows:

Cash                      $10,000

Other Assets         8,000

Liabilities               4,000

Brandon, Capital   7,000

Ryan, Capital        7,000

a. If the Other Assets are sold for $10,000, how much will each partner receive before paying liabilities and distributing the remaining assets?

b. If the Other Assets are sold for $8,000, how much will each partner receive before paying liabilities and distributing remaining assets?

 Part B (20 points each for a possible total of 40 points)

1. Simon Brothers pays $47,000 into a bond sinking fund each year to redeem the future maturity of its bonds. During the first year, the fund earned $3,825. At the time of bond redemption, the fund has a balance of $417,000. Of this, $400,000 was used to redeem the bonds. Journalize the following entries.

a. Initial deposit

b. The first year's interest

c. The redemption of the bonds

2. On January 1, Auctions Online issued $300,000, 9%, 10-year bonds to lenders at the contract rate. Interest is to be paid semiannually on July 1 and January 1. Journalize the following entries.

a. Issued the bonds

b. Paid first semiannual interest payment

c. Retired the bonds at maturity 

Part C (15 points each for a possible total of 30 points)

1. Prepare a statement of retained earnings in proper form for White Corporation for the year ended December 31, 2012, from the following:

Retained Earnings, January 1, 2012                                $2,000

Dividends paid during the year                                              800

Net income for the year                                                       3,000

Correction of prior year error. Purchase

of land recorded as rent expense                                       1,000

2. Curtis Corporation's balance sheet included the following:

Common Stock, $5 par value, 5,000 shares issued

and outstanding                                                                $25,000

Retained Earnings                                                             20,000

Total Stockholders' Equity                                                $45,000

Prepare journal entries for the following transactions.

May   3        Issued 500 shares at $6 per share.

          9        Reacquired 100 shares at $4 per share.

          15      Reissued 50 of the Treasury shares at $7 per share.

          17      Reissued 10 of the Treasury shares at $3 per share.

Part A (5 points each for a possible total of 15 points)

The following information is given for Tripp Company, which uses the indirect method.

          Net income                                          $20,000

          Depreciation expense                         3,000

          Increase in accounts receivable         2,000

          Payment of dividends                         2,000

          Proceeds from sale of equipment       6,000

          Increase in accounts payable             4,000

          Decrease in inventory                         3,000

From the information provided, answer the following questions:

(1) The cash flow from operating activities is ________.

(2) The cash flow from investing activities is ________.

(3) The cash flow from financing activities is ________. 

Part B (5 points each for a possible total of 25 points)

Selected data for Stick's Design are given as of December 31, Year 1 and Year 2 (rounded to the nearest hundredth).

                                                                                Year 2                   Year 1

Net Credit Sales                                                      $25,000                 $30,000

Cost of Goods Sold 16,000                                     18,000

Net Income                                                              2,000                     2,800

Cash                                                                        5,000                     900

Accounts Receivable                                              3,000                     2,000

Inventory                                                                 2,000                     3,600

Current Liabilities                                                    6,000                     5,000

Compute the following:

(1) Current ratio for Year 2.

(2) Acid-test ratio for Year 2.

(3) Accounts receivable turnover for Year 2.

(4) Average collection period for Year 2.

(5) Inventory turnover for Year 2.

Part C (30 points)

Prepare an income statement showing departmental contribution margin based on the following:

                                                                                Dept. X        Dept. Y        Rent

Expense

Space (square feet)                                                17,500         35,000

Net Sales                                                                $60,000       $40,000

Cost of Goods Sold                                                 18,000         16,000

Rent Expense (allocated based on square feet)                                             $2,700 

 Part D (5 points each for a possible total of 30 points)

From the following transactions, prepare the appropriate general journal entries for the month of April.

(1) Raw materials costing $60,000 were issued from the storeroom.

(2) Direct labor of $53,000 was charged to production.

(3) Indirect labor costs of $17,000 were incurred.

(4) Overhead was applied at the rate of 40% of direct labor dollars.

(5) Completed products costing $42,000 were transferred to finished goods.

(6) Products costing $32,000 were sold.