Description
Assignment 04:
Part A:
1)
After several years of business,
Abel, Barney, and Cole are liquidating. The following are post-closing account
balances.
Cash 18,000
Inventory 73,000
Other
assets 157,000
Accounts Payable 61,000
Abel, Capital 50,000
Barney, Capital 50,000
Cole, Capital 87,000
Non-cash assets are sold for
$275,000. Profits and losses are shared equally.
After all liabilities are paid,
divide the remaining cash amongst the partners.
2)
The partnership of Brandon and
Ryan is being liquidated. All gains and losses are shared in a 3:1 ratio,
respectively. Before liquidation, their balance sheet balances are as follows:
Cash $10,000
Other
Assets 8,000
Liabilities 4,000
Brandon,
Capital 7,000
Ryan,
Capital 7,000
a) If the Other Assets are sold
for $10,000, how much will each partner receive before paying liabilities and
distributing the remaining assets?
b) If the Other Assets are sold
for $8,000, how much will each partner receive before paying liabilities and
distributing remaining assets?
Part B:
1)
Simon Brothers pays $47,000 into
a bond sinking fund each year to redeem the future maturity of its bonds.
During the first year, the fund earned $3,825. At the time of bond redemption,
the fund has a balance of $417,000. Of this, $400,000 was used to redeem the
bonds. Journalize the a) initial deposit; b) the first year’s interest; and c)
the redemption of the bonds.
2)
On January 1, Auctions Online
issued $300,000, 9%, 10-year bonds to lenders at the contract rate. Interest is
to be paid semiannually on July 1 and January 1. Journalize the following
entries:
a. Issued the bonds.
b. Paid first semiannual interest
payment.
c. Retired the bonds at maturity.
a.
Part C:
1)
Prepare a statement of retained
earnings in proper form for White Corporation for the year ended December 31,
20xx, from the following:
Retained
Earnings, January 1, 2012 $2,000
Dividends
paid during the year 800
Net
income for the year 3,000
Correction
of prior year error. Purchase
of land
recorded as rent expense 1,000
2)
Curtis Corporation’s balance
sheet included the following:
Common
Stock, $5 par value, 5,000 shares issued
and
outstanding $25,000
Retained
Earnings 20,000
Total Stockholders’ Equity $45,000
Prepare journal entries for the
following transactions:
May
3 Issued
500 shares at $6 per share.
9 Reacquired
100 shares at $4 per share.
15 Reissued
50 of the Treasury shares at $7 per share.
17 Reissued
10 of the Treasury shares at $3 per share.
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