KINDLY DO 2 PAGE MEMO with other details as instructed
carren45
SUO_ACC5328_W1_A4.pdf
Page 1 of 2 ACC5328 Financial Accounting III
© 2008 South University
Panache, Inc.
The Lion Tire file contained the following:
1/2/2007 Purchase advice for the purchase of 30,000 shares of Lion Tire at $12 per share
The following balance sheet was also in the file, with a notation that the carrying values and fair values of Lion’s assets were the same.
Lion Tire, Inc. Balance Sheet
As of December 31, 2006 (in thousands)
Assets Liabilities and Stockholders’ Equity Current Assets $ 60,000 Liabilities $300,000 Property, Plant & Equipment, net 600,000 Other Assets 240,000 Common Stock, no par 180,000 Retained Earnings 420,000 Total Stockholders’ Equity 600,000 Total Assets $900,000 Total Liabilities and Stockholders’ Equity $900,000
4/1/2007 Check stub and copy of deposit ticket with the notation “Dividend received from Lion Tire @ $.50 per share”
10/1/2007 Check stub and copy of deposit ticket with the notation “Dividend received from Lion Tire @ $.50 per share”
12/31/2007 Section of Wall Street Journal for December 31, 2007, showing Lion Tire stock closed at a price of $15 per share
12/31/2007 Condensed income statement and statement of retained earnings for Lion Tire as of December 31, 2007.
Lion Tire, Inc. Lion Tire, Inc. Income Statement Statement of Retained Earnings For the Year Ended December 31, 2007 For the Year Ended December 31, 2007 Revenues $600,000 Beginning Retained Earnings $ 420,000 Expenses 408,000 Add Net Income 192,000 Net Income $192,000 612,000 Less: Cash Dividends 100,000 Ending Retained Earnings $512,000
Page 2 of 2 ACC5328 Financial Accounting III
© 2008 South University
Panache’s general ledger accounts related to Lion Tire are shown below: Available-for-Sale Securities Date Description Debit Credit Balance 1/2/07 Purchase 30,000 shares of Lion Tire no-par common stock $360,000 $360,000 Dividend Income Date Description Debit Credit Balance 4/1/07 Cash dividend received from Lion Tire $15,000 $15,000 10/1/07 Cash dividend received from Lion Tire 15,000 $30,000
