accounting homework

profilemmaram
201_extra_credit_3_spring_2016.xlsx
Home>Business & Finance homework help>Accounting homework help>accounting homework

Facts

Extra Credit 3 - Due in TA mailbox Saturday May 14 at 10pm.
Citikonk Corporation balance sheet at 12/31/15 is presented below.
Citikonk Corporation
Balance Sheet
12/31/15
Cash $ 16,500 Accounts payable $ 22,530
Merchandise Inventory 21,300 Common stock ($1 par) 8,000
Prepaid Insurance 1,400 Paid in capital in excess of par 64,000
Equipment 110,000 Retained earnings 18,870
Accumualed depreciation (35,800)
$ 113,400 $ 113,400
During 2016, the following transactions occurred:
1. Purchased $123,600 inventory on account. Perpetual is used.
2. Sales made on account to customers for $180,000 plus 5.5% sales tax. Cost of sales were $111,300.
3. Received $10,000 cash down payment for orders to be shipped next year.
4. Issued 10 year, $40,000 face, 8% bonds on 7/2/16 at 103. The bonds pay interest every 1/1 and 7/1.
5. Collected $160,000 on account.
6. Paid other operating expenses of $27,500.
7. Paid $121,030 on account.
8. Paid $8,000 to the state for some of the sales tax collected from customers.
9. On 1/1/16 sold equipment which cost $20,000 with accumulated depreciation of $8,500 for $4,000 cash.
10. Issued 1,100 shares of $100 par 8% preferred stock for $160,000 cash.
11. Purchased equipment on 7/1/16 for $80,000 for cash.
12. Purchased 400 shares of Citikonk common stock from a disgruntled shareholder for $40 per share.
13. Recorded wages and payroll taxes. Gross wages were $20,000, FICA tax was withheld at a 7.55% rate,
federal income taxes (FIT) of $2,000 were withheld, state income taxes (SIT) of $500 were withheld.
The Federal unemployment tax (FUTA) rate is 0.9% and the state unemployment (SUTA) rate is 3.5%.
The net wage checks were given immediately to employees. The payroll taxes will be paid to the IRS and
state in early January.
Requirement A:
i - Journalize 1 - 13 above
ii - Post to the ledger
iii - Prepare an unadjusted trial balance which will be used as the first 2 columns of a worksheet.
(See Requirement B.)
***Four Optional solution templates have been prepared to assist you. They can be accessed by clicking on
the Solution tabs below. Use of Microsoft Excel is optional. Hand prepared solutions are also acceptable.
Requirement B: Using your unadjusted trial balance above and the following data for adjusting
entries, prepare a 10 column worksheet similar to the one in the chapter 4 appendix of your text.
(a) Depreciation on equipment purchased in previous years uses straight-line, 5 year life, no salvage value
For the 2016 purchase (11 above) use a useful life of 10 years, $15,000 salvage, double declining balance.
(b) Accrue bond interest payable (Premium amortization too.).
(c) The prepaid insurance relates to a policy purchased in 2015 that expires at a rate of $80 per month.
(d) The company estimates that all accounts receivable are collectible. So don't worry about bad debts.
Requirement C: Prepare a Statement of Cash Flows.
Hints: In operating activities subtract gains and premium amortization.

Solution Journal

Extra Credit 3 Name:
G E N E R A L J O U R N A L Dis:
a.1.
a.2.
a.3.
a.4.
a.5.
a.6.
a.7.
a.8.
a.9.
a.10.
a.11.
a.12
a.13

Solution Ledger

Extra Credit 3 0
G E N E R A L L E D G E R Page 1
CASH DR CR BALANCE
Beginning 0
item 3 0
item 4 0
item 5 0
item 6 0
item 7 0
item 8 0
item 9 0
item 10 0
item 11 0
item 12 0
item 13 0
ACCOUNTS RECEIVABLE DR CR BALANCE
Beginning 0
item 2 0
item 5 0
MERCHANDISE INVENTORY DR CR BALANCE
Beginning 0
item 1 0
item 2 0
PREPAID INSURANCE DR CR BALANCE
Beginning 0
EQUIPMENT DR CR BALANCE
Beginning 0
item 9 0
item 11 0
ACCUMULATED DEPRECIATION DR CR BALANCE
Beginning 0
item 9 0
G E N E R A L L E D G E R Page 2
ACCOUNTS PAYABLE DR CR BALANCE
Beginning 0
item 1 0
item 7 0
SALES TAX PAYABLE DR CR BALANCE
item 2 0
item 8 0
UNEARNED REVENUE DR CR BALANCE
item 3 0
FICA PAYABLE DR CR BALANCE
item 13 0
item 13 0
FIT PAYABLE DR CR BALANCE
item 13 0
SIT PAYABLE DR CR BALANCE
item 13 0
FUTA PAYABLE DR CR BALANCE
item 13 0
SUTA PAYABLE DR CR BALANCE
item 13 0
BONDS PAYABLE DR CR BALANCE
item 4 0
PREMIUM ON BONDS PAYABLE DR CR BALANCE
item 4 0
COMMON STOCK DR CR BALANCE
Beginning 0
G E N E R A L L E D G E R Page 3
Preferred Stock DR CR BALANCE
Beginning 0
item 10 0
PAID IN CAPITAL IN EXCESS OF PAR DR CR BALANCE
Beginning 0
item 10 0
TREASURY STOCK DR CR BALANCE
item 12 0
RETAINED EARNINGS DR CR BALANCE
Beginning 0
SALES DR CR BALANCE
item 2 0
COST OF GOODS SOLD DR CR BALANCE
item 2 0
OPERATING EXPENSES DR CR BALANCE
item 6 0
WAGE EXPENSE DR CR BALANCE
item 13 0
PAYROLL TAX EXPENSE DR CR BALANCE
item 13 0
LOSS ON EQUIPMENT DISPOSALS DR CR BALANCE
item 9 0

Solution Worksheet

Requirement B Citikonk Corporation
Work Sheet
For the Year Ended December 31, 2016
0 Unadjusted Adjusted Income Balance
Trial Balance Adjustments Trial Balance Statement Sheet
Account Title DR CR DR CR DR CR DR CR DR CR
Cash 0
Accounts Receivable 0
Merchandise Inventory 0
Prepaid Insurance 0 c
Equipment 0
Accumulated depreciation 0 a
Accounts Payable 0
Sales Tax Payable 0
Unearned Revenue 0
FICA Payable 0
FIT Payable 0
SIT Payable 0
FUTA Payable 0
SUTA Payable 0
Bonds Payable 0
Premium on Bonds Payable 0 b
Common Stock 0
Preferred Stock 0
Paid in Capital in Excess of Par 0
Treasury Stock 0
Retained Earnings 0
Sales 0
Cost of Goods Sold 0
Operating Expenses 0
Wage Expense 0
Payroll Tax Expense 0
Loss on disposal 0
0 0
Additional accounts:
Depreciation Expense a
Interest Expense b
Interest payable b
Insurance Expense c
Totals 0 0 0 0 0 0 0 0
Net Loss
Totals 0 0 0 0

Solution Cash Flows

Citikonk Corporation 0
Statement of Cash Flows
For the Year ended 12/31/15
CASH FROM OPERATING ACTIVITIES:
Net Cash From Operations 0
CASH FROM INVESTNG ACTIVITIES:
Net Cash From Investing 0
CASH FROM FINANCING ACTIVITIES:
Net Cash From Financing 0
NET INCREASE IN CASH 0
Cash at beginning of year
Cash at end of year 0