Question

Journalize Entries 38 Points: 30 Minutes stock authorized. During Rowlands Corporation has 100,000 shares of $10 par value it had the following transactions related to its preferred stock. Exercise 1 DATE a) issued 20,000 shares at $55 per share. a) issued 10,000 shares for equipment having a $850,000 asking price. The stock hada of $75 per share Journalize the transactions in the following page On January 1, 2019, the stockholders' stock (S5 par value) $1,500,000; paid-in capital in excess of par $1,200,000. During the year, the following treasury equity section of Intercontinental Corporation shows: value $1,000,000; and retainede d. stock transactions occurre Mar. 1 Purchased 30,000 shares for cash at $20 per share Junly 1 Sold 6,000 treasury shares for cash at $27 per share. Nov. 10 Sold 8,500 treasury shares for cash at $14 per shares Instructions: Journalize the transactions on the following page. Exercise 3:(24 Points On January 1, 2019 Focus Corporation issued $500,000, 6%, 5-year bonds at 105. Interest is payable annually on January 1. The company used the straight-line method of amortization for bonds. Instructions (Prepare journal entries on the following page.) 1s Using the information above, prepare journal entries to record the following transactions; (a) Issuance of the bonds on January 1, 2019 (b) Accrual of interest on December 31, 2019 (c) Payment of interest on January 1, 2020. 2> Assume that the bonds were issued at 95. Prepare the journal entries to record the follo transactions. (a) Issuance of the bonds on January 1, 2019 (b) Accrual of interest on December 31, 2019 Payment of interest on January 1, 2020. (c) A3> Assume the bonds that were originally issued at 105, are retired early on January 1, 2022a Prepare the entry to record the early retirement. The balance in the Premium on Bonds Payal account on January 1, 2022 is $10,000. Journalize Entries-CONTINUED 24 Points: 10 Minutes Exer DA Juno Corporation's stockholders' equity section at December 31, 2019 appears below: Stockholders equity Paid-in capital $600,000 150.000 Common stock, $10 par, 60,000 outstanding Paid-in capital in excess of par $750,000 150,000 $900.000 Total paid-in capital Retained earnings Total stockholders' equity On March 3, 2020, the board of directors of Juno Corporation declared a $1 per share cash dividend, payable on April4, 2020 to stockholders of record on April 16. On June 30, 2020, the board of directors of Juno distributable on July 31, 2020, to stockholders of record on July 15, 2020. The fair value of Juno Corporation declared a 20% stock dividend. Corporation's stock on June 30, 2020, was $15 per share. On December 1, 2020, the board of directors declared a 2 for 1 stock split effective December 1, 2020. Juno Corporation's stock was selling for $90 on December 1, 2020, before the stock split was declared. Par value of the stock was adjusted. Net income for 2020 was $190,000 and there were no cash dividends declared Instructions Prepare the journal entries required on the appropriate dates in the year 2020 to record the cash dividend, the stock dividend. and the stock split. (a) (+15@+5 each) (b) Fill in the amount that would appear in the stockholders' equity section for Juno Corporation at December 31, 2020, for the following items: (Present you answers in the Answer Booklet) 1. Common stock +3 2. Number of shares outstanding +3 Par value per share +3 3. Page 6 of Financial Statement Preparation 38 Points: 15 Minutes Planner Corporation's comparative balance sheets are presented below Comparative Balance Sheets December 31 PLANNER CORPORATION $ 21,570 18,200 18,000 Cash Accounts receivable Land 260% 0,000 Building Accumulated depreciation 120,100 5112.770 $12,370 75,000 25,400 Total $31,100 Accounts payable Common stock Retained earnings 69,000 20,000 Total Additional information: 1. Net income was $27,900. Dividends declared and paid were $22,500 All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $5,900. tructions: On the following page, Prepare. in GOOD FORM, a statement of cash flows for 2017 using the indirect method n 2019, Spanish Fort Corporation Soanish fort Corporation had net sales of $500,000 and cost of goods sold of s 52500see 5s,.on seling espenses were $29.85o, and interest expene we $7,500 the space provided) Instructions On the following page (using the space (a) Prepare Corporation too FORM a condensed multi-step income statement for Spanish Fort the year ended December 31, 2019 CHAPTER 22-CVP ANALYSIS 50 Points: 30 Minutes Crutcherfield Company had sales in 2018 of $1,800,000 on 90,000 units. Variable costs totaled 51,080,000, and fixed costs totaled $450,000. new raw material is available that will decrease the variable costs per unit by 20% (or S240). However, to new raw material, fixed operating costs will increase by $80,000. Management on to customers in the process the feels that one-half of the decline in the variable costs per unit should be passed form of a sales price reduction. The marketing department expects that t result in a 7% increase in the number of units sold. Instructions- 1. What is the unit breakeven and dollar breakeven for 2018 using the 2018 information provided? 2. Prepare the CVP income statement for 2018. 3. Prepare the CVP income statement based on the PROPOSED changes. 4. What is the unit breakeven and dollar breakeven based on the proposed changes? 5. Do you recommend the proposed change be made? Why or why not? Be specific. -Present Computations Below- Page 10 of 16

Answer 1

Exercise-1 a) Bank A/c Dr 11,00,000 2,00,000 9,00,000 To Preferred Stock A/c To Securities Premium A/c (Being shares issued at premium) b) Equiment A/c Dr 8,50,000 To Preferred Stock A/c To Securities Premium A/c 1,00,000 7,50,000 (Being shares issued against the purchase of equipment) Exercise - 2 a) Investments A/c Dr 6,00,000 To Cash A/c 6,00,000 (Being purchase of shares for cash) Cash A/c Dr. b) 1,62,000 To Investments A/c To Profit on sale of investments A/c 1,20,000 42,000 (Being shares sold for cash at profit) Cash A/c Dr. Loss on sale of investments A/c c) 1,19,000 51,000 To Investments A/c 1,70,000 (Being shares sold for cash at loss)

Exercise - 4 Cash Flow Statement Particulars Cash flow from operating activities Profit Adjustments Add i) Loss on sale of Land ii) Depreciation for the year Amount Amount 27,900 2,100 5,000 Working capital adjustments i) Decrease in Trade receivables i) Decrease in Trade Payables 5,200 18,730 6,430 Cash flow from operating activities (A) Cash flow from Investing activities i) Sale proceeds of Land Cash flow from Investing activities (B) Cash flow from Financing activities i) Issue of common stock ii) Dividend Paid Cash flow from Financing activities (C Net cash flows during the year (A+B+C) Add: Opening Cash flows Closing cash flows 21,470 5,900 5,900 6,000 -22,500 16,500 10,870 10,700 21,570

Note 1 Land A/c Particulars Amount ($) Particulars Amount ($) 8,000 18,000 26,000 To Bal b/f 26,000 By Sale of land By bal c/d 26,000 Sale value of Land () Cost of Land sold (S) Loss on sale 5900 8000 -2100 Note 2 Depreciation A/c Particulars Amount ($) Particulars Amount ($) 10,000 5,000 15,000 By Bal b/f To Bal c/f 15,000 By P&l a/c 15,000

a) Multi Step Income Statement Amount (S) 5,00,000 3,00,000 2,00,000 93,000 1,07,000 29,850 77,150 7,500 69,650 Particulars Net Slaes Less: Cost of Goods Sold Gross profit Less: Operating Expenses Operating profit Less: Selling expenses Profit Before Interest and Tax Less: Interest expenses Profit before tax