Hw
jake22
TemplatesWeek7.docxEXERCISE 9-8A
a.
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Liab. |
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Equity |
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Exp. |
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Net Inc. |
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Cash Flow |
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3b. |
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9. |
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10. |
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EXERCISE 9-8A (cont.)
b.
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Ozark Sales General Journal for 2016 |
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Account Title |
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Cash |
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Common Stock |
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Merchandise Inventory |
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Accounts Payable |
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3a. |
Cash |
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Sales Revenue |
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Sales Tax Payable |
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3b. |
Cost of Goods Sold |
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Merchandise Inventory |
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4. |
Warranty Expense |
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Warranties Payable |
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5. |
Sales Tax Payable |
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Cash |
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6. |
Cash |
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Notes Payable |
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7. |
Warranty Payable |
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Cash |
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8. |
Operating Expense |
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Cash |
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9. |
Accounts Payable |
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Cash |
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10. |
Interest Expense1 |
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Interest Payable |
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EXERCISE 9-8A b. (cont.)
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Ozark Sales T-Accounts for 2016 |
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Stockholder’s Equity |
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Cash |
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Accounts Payable |
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Common Stock |
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9. |
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1. |
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3a. |
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Bal. |
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Bal. |
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6. |
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9. |
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Sales Tax Payable |
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Sales Revenue |
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Bal. 284,600 |
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5. |
3a. |
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3a. 510,000 |
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Bal. |
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Bal. 510,000 |
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Merchandise Inventory |
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2. |
3b. |
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Warranties Payable |
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Cost of Goods Sold |
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Bal. |
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7. |
4. |
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3b. |
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Bal. 4,000 |
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Bal. 330,000 |
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Interest Payable |
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Operating Expenses |
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10. |
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Bal. 667 |
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Bal. 78,000 |
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Notes Payable |
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Warranty Expense |
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6. |
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4. |
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Bal. 50,000 |
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Bal. 10,200 |
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Interest Expense |
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10. |
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Bal. 667 |
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EXERCISE 9-8A (cont.)
c.
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Ozark Sales Income Statement For the Year Ended December 31, 2016 |
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Sales Revenue |
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Cost of Goods Sold |
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Gross Margin |
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Expenses |
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Operating Expenses |
$78,000 |
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Warranty Expense |
10,200 |
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Total Operating Expenses |
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Operating Income |
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Interest Expense |
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Net Income |
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EXERCISE 9-8A c. (cont.)
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Ozark Sales Balance Sheet As of December 31, 2016 |
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Assets |
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Cash |
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Merchandise Inventory |
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Total Assets |
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Liabilities |
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Accounts Payable |
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Sales Tax Payable |
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Warranties Payable |
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Interest Payable |
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Notes Payable |
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Total Liabilities |
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Stockholders’ Equity |
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Common Stock |
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Retained Earnings |
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Total Stockholders’ Equity |
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141,133 |
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Total Liabilities and Stockholders’ Equity |
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$334,600 |
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EXERCISE 9-8A c. (cont.)
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Ozark Sales Statement of Cash Flows For the Year Ended December 31, 2016 |
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Cash Flows From Operating Activities: |
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Inflow from Customers |
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Inflow from Sales Tax |
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Outflow to Purchase Inventory |
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Outflow for Expenses1 |
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Outflow for Sales Tax |
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Net Cash Flow from Operating Activities |
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Cash Flows From Investing Activities |
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-0- |
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Cash Flows From Financing Activities: |
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Inflow from Stock Issue |
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Inflow from Loan |
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Net Cash Flow from Financing Activities |
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Net Change in Cash |
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Plus: Beginning Cash Balance |
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Ending Cash Balance |
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d. Current Liabilities:
Accounts Payable $
Sales Tax Payable
Warranty Payable
Interest Payable
Notes Payable
Total Current Liabilities $
EXERCISE 9-10A
a.
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Clay - March |
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Gross Earnings |
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Deductions: |
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Federal Income Tax ($3,600 x %) |
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FICA Tax - SS ($3,600 x %) |
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FICA Tax - Medicare ($3,600 x %) |
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Total Deductions |
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Net Pay |
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Philip – March |
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Gross Earnings |
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Deductions: |
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Federal Income Tax ($x %) |
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FICA Tax - SS ($x %) |
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FICA Tax - Medicare ($ x %) |
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Total Deductions |
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Net Pay |
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EXERCISE 9-10A
b.
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Clay - December |
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Gross Earnings |
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Deductions: |
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Federal Income Tax |
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FICA Tax - SS |
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FICA Tax - Medicare |
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Total Deductions |
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Net Pay |
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Philip – December |
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Gross Earnings |
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Deductions: |
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Federal Income Tax |
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FICA Tax - Medicare |
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Total Deductions |
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Net Pay |
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c.
d.
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Amount appearing on W-2 for 2016 |
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Clay |
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Box 1 Wages, tips, and other compensation |
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Box 2 Federal income tax withheld |
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Box 3 Social Security wages |
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Box 4 Social Security tax withheld |
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Box 5 Medicare wages and tips |
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Box 6 Medicare tax withheld |
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EXERCISE 9-10A d. (cont.)
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Amount appearing on W-2 for 2017 |
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Philip |
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Box 1 Wages, tips, and other compensation |
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Box 2 Federal income tax withheld |
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Box 3 Social Security wages |
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Box 4 Social Security tax withheld |
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Box 5 Medicare wages and tips |
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Box 6 Medicare tax withheld |
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EXERCISE 10-4A
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Effect of Transactions on Financial Statements |
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Balance Sheet |
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Income Statement |
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Statement of |
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No. |
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Assets |
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Liab. |
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S. Equity |
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Rev. |
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Exp. |
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Net Inc. |
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Cash Flow |
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1. |
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2. |
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b. (1)
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Revenue |
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Expenses |
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Operating Expenses |
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Interest Expense |
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Total Expenses |
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Net Income |
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$ 5,000 |
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(2)
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Cash Flows From Operating Activities: |
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Inflow from Customers |
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Outflow for Expenses |
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Net Cash Flow from Operating Activities |
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(3)
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Cash Flows From Financing Activities: |
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Inflow from Issue of Note |
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Outflow to Repay Note |
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Net Cash Flow from Financing Activities |
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c. EXERCISE 10-5A
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Month |
Amount Borrowed (Repaid) |
Balance End of Month |
Interest Rate |
Interest Expense |
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January |
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.06/12 |
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February |
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.065/12 |
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March |
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.06/12 |
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Date |
Account Titles |
Debit |
Credit |
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2016 |
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Jan. 1 |
Cash |
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Line of Credit Payable |
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Jan. 31 |
Interest Expense |
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Cash |
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Feb. 1 |
Cash |
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Line of Credit Payable |
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Feb. 28 |
Interest Expense |
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Cash |
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March 1 |
Line of Credit Payable |
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Cash |
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March 31 |
Interest Expense |
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Cash |
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EXERCISE 10-6A
a.
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Doyle Company General Journal |
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Date |
Account Titles |
Debit |
Credit |
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2016 |
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Jan. 1 |
Cash |
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Bonds Payable |
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Jan. 1 |
Land |
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Cash |
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Dec. 31 |
Cash |
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Lease Revenue |
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Dec. 31 |
Interest Expense ($500,000 x 7%) |
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Cash |
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Dec. 31 |
Lease Revenue |
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Interest Expense |
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Retained Earnings |
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2017 |
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Dec. 31 |
Cash |
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Lease Revenue |
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Dec. 31 |
Interest Expense |
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Cash |
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Dec. 31 |
Lease Revenue |
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Interest Expense |
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Retained Earnings |
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EXERCISE 10-6A a. (cont.)
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Doyle Company |
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Assets |
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Liabilities |
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Stockholders’ Equity |
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Cash |
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Bonds Payable |
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Retained Earnings |
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2016 |
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2016 |
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2016 |
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1/1 |
1/1 |
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1/1 |
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12/31 |
12/31 |
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Bal. |
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Bal. |
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Bal. |
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2017 |
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2017 |
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12/31 |
12/31 |
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Bal. |
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Bal. 180,000 |
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Lease Revenue |
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2016 |
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Land |
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12/31 |
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2016 |
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Bal. -0- |
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1/1 |
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2017 |
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Bal. |
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cl |
12/31 |
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Bal. -0- |
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Interest Expense |
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2016 |
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12/31 |
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Bal. -0- |
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2017 |
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12/31 |
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Bal. -0- |
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10-23
EXERCISE 10-6A b. (cont.)
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Doyle Company |
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Financial Statements |
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2016 |
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2017 |
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Income Statements for the Year Ended Decebmer 31 |
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Lease Revenue |
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Interest Expense |
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Net Income |
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$ 90,000 |
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$ 90,000 |
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Balance Sheets as of December 31 |
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Assets |
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Cash |
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Land |
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Total Assets |
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Liabilities |
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Bonds Payable |
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Stockholders’ Equity |
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Common Stock |
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Retained Earnings |
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Total Stockholders’ Equity |
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Total Liab. and Stockholders’ Equity |
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$590,000 |
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$680,000 |
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Statements of Cash Flows for the Year Ended December 31 |
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Cash Flows From Operating Activities: |
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Receipts from Revenue |
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Paid for Interest |
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Net Cash Flow from Operating Act. |
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Cash Flows From Investing Activities: |
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Paid to Purchase Land |
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Cash Flows From Financing Activities: |
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Proceeds from Bond Issue |
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Net Change in Cash |
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Plus: Beginning Cash Balance |
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Ending Cash Balance |
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EXERCISE 10-7A
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Bell Corp. General Journal |
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Date |
Account Titles |
Debit |
Credit |
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2016 |
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Jan.1 |
Cash |
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Bonds Payable |
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Dec. 31 |
Interest Expense* |
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Cash |
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2017 |
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Dec. 31 |
Interest Expense |
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Cash |
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EXERCISE 10-8A
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Nivan Co. |
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Date |
Account Titles |
Debit |
Credit |
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2016 |
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Jan. 1 |
Cash |
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Bonds Payable |
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2020 |
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Dec. 31 |
Loss on Bond Redemption |
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Bonds Payable |
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Cash |
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EXERCISE 10-19A
a.
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Face Value |
− |
Bond Price |
= |
Discount |
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b.
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Carrying Value |
x |
Effective Rate |
= |
Interest Expense |
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c. Compute the Ending Balance in the Discount Account
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Face Value |
x |
Stated Rate |
= |
Cash Payment |
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Interest Expense |
− |
Cash Payment |
= |
Amortization |
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Beginning Discount |
− |
Amortization |
= |
Ending Discount |
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Bond Carrying Value as of December 31, 2016
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Bond Payable (Face Value) |
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Discount on Bonds Payable |
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Carrying Value |
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d.
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Account Titles |
Debit |
Credit |
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Interest Expense |
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Bond Discount |
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Cash |
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EXERCISE 10-20A
a.
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Date |
Cash Payment |
Interest Expense |
Discount Amortization |
Carrying Value |
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January 1, 2016 |
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76,888 |
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December 31, 2016 |
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December 31, 2017 |
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December 31, 2018 |
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December 31, 2019 |
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December 31, 2020 |
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Totals |
32,000 |
35,112 |
3,112 |
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b.
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Bond liability |
$ |
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Less: Bond discount |
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Carrying value |
$ |
c.
d.
EXERCISE 10-25A
a.
Current Total Current Total
Situation Assets Assets Liabilities Liabilities
Currently
Using bonds
Using stock
If Bonds If Stock
Currently Are Issued Is Issued
Current ratio
Debt to assets ratio
(1)
(2)
(3)
(4)
(5)
b. Bonds Stock
EBIT
Interest expense
Pretax earnings
Tax expense (40%) (21,600) (24,000)
Net earnings
Dividends
Additional retained earnings $ $
