Balance Sheet – The following beginning balance sheet and statement of cash flows for 2007 are available for Fazzi Company: Balance SheetJanuary 1, 2007 Cash $900 Accounts receivable 2,300 Land 4,900 Equipment $20,000 Less: Accumulated depreciation 9,100 10,900 Total Assets $19,000 Accounts payable $1,600 Notes payable 3,900 Common stock, $5 par 4,500 Additional paid-in capital 1,800 Retained earnings 7,200 Total Liabilities and Stockholders’ Equity $19,000 […]

Erroneous Statement of Cash Flows – The 2007 statement of cash flows for the Andell Company, as developed by its bookkeeper, is shown here: Cash Flows StatementDecember 31, 2007 Inflows of Cash Operating Activities Net income $10,600 Add: Proceeds from sale of equipment 4,400 Proceeds from issuance of stock 4,300 Less: Payment for investment in bonds 6,000 Payment of long-term note 5,000 Net cash inflows […]

Partially Completed Worksheet (Spreadsheet) – The Hanks Company has prepared the following changes in account balances for the worksheet to support its 2007 statement of cash flows: A B C D Worksheet Entries Debit Credit Account Title Increase (Decrease) Debits Cash $830 Noncash Accounts Accounts receivable 290 Inventory 1,280 Investments 1,550 Land 700 Equipment 2,300 Patents (net) 100 Total $4,870 Credits Accumulated depreciation $350 Accounts […]

Worksheet (Spreadsheet) – The following 2007 information is available for the Payne Company: Comparative Balance Sheets 1-Jan-07 31-Dec-07 Cash $400 $600 Accounts receivable 220 200 Inventory 370 610 Land 250 410 Equipment 2,070 2,200 Less: Accumulated depreciation -310 -400 Total Assets $3,000 $3,620 Accounts payable $800 $500 Notes payable (long-term) 900 720 Common stock, no par 600 1,000 Retained earnings 700 1,400 Total Liabilities and […]

Worksheet (Spreadsheet) and Statement – The following 2007 information is available for the Stewart Company: Condensed Income Statement for 2007 Sales $9,000 Cost of goods sold -6,000 Other expenses -2,000 Loss on sale of equipment -260 Gain on sale of land 400 Net income $1,140 Comparative Balance Sheets December 31,2006 December 31,2007 Cash $700 1,130 Accounts receivable 450 310 Inventory 350 400 Land 300 500 […]

This exercise will illustrate how the components of stockholders” equity should be reported in the balance sheet. Al Gore Corporation”s charter authorizes 200,000 shares of $20 par value common stock, and 50,000 shares of 6% cumulative preferred stock, par value $100 per share. The preferred stock has a call price of $105. The corporation engaged in the following stock transactions between the date of incorporation […]

Retirement of Debt – Moore Company is preparing its statement of cash flows for the current year. During the year, the company retired two issuances of debt and properly recorded the transactions. These transactions were as follows: 1. Paid cash of $18,000 to retire bonds payable with a face value of $20,000 and a book value of $18,300. 2. Paid cash of $38,000 to retire […]

This exercise will illustrate the use of the cost method of accounting for treasury stock transactions under a variety of price relationships. Cheers Corporation reported the following stockholders” equity items at December 31, 2013. Each share of stock was issued in a prior year for $12 each. Common Stock. $10 Dar $350.000 Paid-in Capital in Excess of Par Value 70,000 Retained Eaminqs 710.000 Total stockholders” […]

Interest and Income Taxes – The Staggs Company has prepared its 2007 statement of cash flows. In conjunction with this statement, it plans to disclose the interest and income taxes it paid during 2007. The following information is available from its 2007 income statement and beginning and ending balance sheet: Income Statement Interest expense $12,000 Income tax expense 35,000 Balance Sheet Cr. Bal. 01/01/07 Cr. […]

This exercise will illustrate the journal entry required to record the issuance of bonds at a price other than par. The Russell Corporation issued 4,000 bonds dated May 1, 2014. These bonds are 10-year term bonds with a face value of $1,000 each and a stated interest rate of 8%. Interest is payable semiannually on November 1 and May 1. Instructions Prepare the journal entry […]