principles of accounting 2 -GRADED PROJECT Directions: Be sure to make an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English spel

principles of accounting 2

GRADED PROJECT
Directions:  Be sure to make an electronic copy of your answer before submitting
it to Ashworth College for grading.  Unless otherwise stated, answer in complete
sentences, and be sure to use correct English spelling and grammar.  Sources
must be cited in APA format.  Your response should be a minimum of one
(1) single-spaced page to a maximum of two (2) pages in length; refer to the
“Assignment Format” page for specific format requirements.
Assignment Details:  This assignment will include the three-part graded project
described below and 30 multiple choice exam questions (Exam 5) covering this lesson,
Corporations and Bonds Payable and the next lesson Investments and Cash Flow.
The combined project and exam portions of this Assignment total 100 points.
You should complete your work for this project at this time and submit it with the
exam questions (available at the Assignments tool) after your next lesson.
Part A
(5 points each for a possible total of 10 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
   Noncash assets are sold for $275,000. Profits and losses are shared
equally.
   After all liabilities are paid, divide the remaining cash amongst the
partners.
PRINCIPLES OF ACCOUNTING 2 75
 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
(10 points each for a possible total of 20 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
76 PRINCIPLES OF ACCOUNTING 2
Part C
(10 points each for a possible total of 20 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
PRINCIPLES OF ACCOUNTING 2 77