Question

Everything was correct for my general ledgers, just got all of this wrong....

American Laser, Inc., reported the following account balances on January 1.

Accounts Receivable	$	5,000
Accumulated Depreciation		30,000
Additional Paid-in Capital		90,000
Allowance for Doubtful Accounts		2,000
Bonds Payable		0
Buildings		247,000
Cash		10,000
Common Stock, 10,000 shares of $1 par		10,000
Notes Payable (long-term)		10,000
Retained Earnings		120,000
Treasury Stock		0

The company entered into the following transactions during the year.

Jan.	15		Issued 5,000 shares of $1 par common stock for $50,000 cash.
Feb.	15		Reacquired 3,000 shares of $1 par common stock into treasury for $33,000 cash.
Mar.	15		Reissued 2,000 shares of treasury stock for $24,000 cash.
Aug.	15		Reissued 600 shares of treasury stock for $4,600 cash.
Sept.	15		Declared (but did not yet pay) a $1 cash dividend on each outstanding share of common stock.
Oct.	1		Issued 100, 10-year, $1,000 bonds, at a quoted bond price of 101.
Oct.	3		Wrote off a $500 balance due from a customer who went bankrupt.

  

Answer 1

Journal Entries

1. Cash A/c Dr. 50,000

To Common Stock 5,000

To Additional paid in capital 45,000

2. Treasury stock A/c Dr. 33,000

To Cash A/c 33,000

3. Cash A/c Dr. 24,000

To Treasury stock A.c 22,000

To Additional Paid in capital 2,000

4. Cash A/c Dr. 4,600

Additional Paid in capital A/c Dr. 2,000

To Treasury stock A/c 6,600

5. Retained Earnings A/c Dr. 14,600

To Dividend Payable A.c 14,600

{10,000 + 5,000 -3,000 + 2,000 + 600 shares} * $1 = $ 14,600

6. Cash A.c Dr. 101,000

To premium on bonds 1,000

To Bonds Payable 100,000

7. Allowance for Bad Debts A/c Dr. 500

To accounts receivable A/c 500

8. Cash A/c Dr. 20,000

To retained earnings 20,000

Balance Sheet

Particulars	Amount (in $)	TOTAL
Non-Current Assets
Buildings (less Depreciation)	217,000	217,000
Current Assets
Cash	176,600
Accounts Receivable	4,500	181,100
Total Assets		398,100
Contributed Capital
Common Stock	15,000
Retained Earnings	125,400
Additional paid in capital- common stock	135,000
Dividend Payable	14,600
Premium on Bond	1,000
TOTAL	291,000
Less: Treasury Stock	(4,400)
Shareholder's Equity		286,600
Liabilities
Bonds Payable	100,000
Notes Payable	10,000
Allowance for doubtful accounts	1,500
Total liabilities		111,500
Total liabilities and shareholder's equity		398,100