2024 – AC 5230 Problem Set 1 Instructions Create a single Excel document with one worksheet tab for each problem Each
AC 5230 Problem Set 1_Five Problems – 2024
AC 5230 Problem Set 1
Instructions:
Create a single Excel document with one worksheet/tab for each problem. Each problem is worth 20 points.
Problem 1
The following accounts appeared on the trial balance of Gaudette Company at December 31, 2008. All accounts have normal balances.
|
Notes Payable |
$64,000 |
Accounts Receivable |
$172,800 |
|
Accumulated Depreciation – Bldg. |
$261,000 |
Prepaid Expenses |
$18,750 |
|
Supplies on Hand |
$12,600 |
Customers’ Deposits |
$1,250 |
|
Accrued Salaries and Wages |
$11,400 |
Common Stock*** |
$375,000 |
|
*Investments in Debt Securities |
$93,800 |
||
|
Cash |
$56,750 |
Inventories (average cost) |
$526,750 |
|
Bonds Payable Due 1/1/12 |
$400,000 |
Land at Cost |
$155,000 |
|
Allowance for Doubtful Accts. |
$2,600 |
Trading Securities**** |
$24,400 |
|
Franchise |
$64,300 |
Accrued Interest on Notes Payable |
$650 |
|
Notes Receivable |
$46,000 |
Buildings at Cost |
$642,000 |
|
Income Taxes Payable |
$52,000 |
Accounts Payable |
$136,650 |
|
Preferred Stock** |
$250,000 |
Additional Paid-in Capital |
$54,600 |
|
Appropriated Retained Earnings |
$98,000 |
||
|
Unappropriated Retained Earnings |
??? |
*The company intends to hold the securities until maturity, which is in ten years.
**8% cumulative; $10 par value; 25,000 shares authorized and outstanding.
***$1 par value; 400,000 shares authorized; 375,000 shares issued and outstanding.
****The company intends to sell the trading securities in the next year.
Directions (20 Points): Prepare a classified balance sheet for Gaudette Company on December 31, 2008 on a separate Excel spreadsheet as directed on the Problem Set 1 directions.
Problem 2
The following balance sheet was prepared by the bookkeeper for Perry Company as of December 31, 2008.
Perry Company
Balance Sheet
as of December 31, 2008
Cash $ 80,000 Accounts payable $ 75,000
Accounts receivable (net) 52,200 Long-term liabilities 100,000
Inventories 57,000 Stockholders’ equity 218,500
Investments 76,300
Equipment (net) 96,000
Patents 32,000
$393,500 $393,500
The following additional information is provided:
1. Cash includes the cash surrender value of a life insurance policy $9,400, and a bank overdraft of $2,500 has been deducted.
2. The net accounts receivable balance includes:
(a) accounts receivable—debit balances $60,000;
(b) accounts receivable—credit balances $4,000;
(c) allowance for doubtful accounts $3,800.
3. Inventories do not include goods costing $3,000 shipped out on consignment. Receivables of $3,000 were recorded on these goods.
4. Investments include investments in common stock, trading $19,000 and available-for-sale $48,300, and franchises $9,000.
5. Equipment costing $5,000 with accumulated depreciation $4,000 is no longer used and is held for sale. Accumulated depreciation on the other equipment is $40,000.
Directions (20 points)Prepare a balance sheet in good form (stockholders’ equity details can be omitted.)
Problem 3
Presented below is financial information of the Lilley Corporation for 2008
|
Beginning Retained Earnings, 1/1/08 |
$950,000 |
|
Gain on the Sale of Investments (normal recurring) |
$110,000 |
|
Sales for the Year |
$30,000,000 |
|
Loss Due to Flood Damage (unusual & infrequent) |
$125,000* |
|
Cost of Goods Sold |
$21,000,000 |
|
Loss on Disposal of Retail Division |
$450,000* |
|
Interest Revenue |
$70,000 |
|
Loss on Operations of Retail Division |
$460,000* |
|
Selling and Administrative Expenses |
5,500,000 |
|
Dividends Declared on Common Stock |
$230,000 |
|
Write-Off of Goodwill |
$520,000 |
|
Dividends Declared on Preferred Stock |
$80,000 |
|
Federal Income Tax on Operations for 2008 |
1,600,000 |
*net of tax
Lilley Corporation decided to discontinue its retail operations and to retain its manufacturing operations. On August 15, Lilley sold the retail operations to Schoen Company. During 2008, there were 250,000 shares of common stock outstanding all year.
Directions (20 Points): Prepare a multiple-step income statement for the year 2008 on a separate Excel spreadsheet as directed in the Problem Set 1 directions.
Problem 4
|
December 31 |
||
|
2009 |
2008 |
|
|
Cash |
$90,000 |
$27,000 |
|
Accounts Receivable |
$92,000 |
$80,000 |
|
Allowance for Doubtful Accounts |
($4,500) |
($3,100) |
|
Inventory |
$155,000 |
$175,000 |
|
Prepaid Expenses |
$7,500 |
$6,800 |
|
Land |
$90,000 |
$60,000 |
|
Buildings |
$287,000 |
$244,000 |
|
Accumulated Depreciation |
($32,000) |
($13,000) |
|
Patents |
$20,000 |
$35,000 |
|
$705,000 |
$611,700 |
|
|
Accounts Payable |
$90,000 |
$84,000 |
|
Accrued Liabilities |
$54,000 |
$63,000 |
|
Bonds Payable |
$125,000 |
$60,000 |
|
Common Stock |
$100,000 |
$100,000 |
|
Retained Earnings – Appropriated |
$80,000 |
$10,000 |
|
Retained Earnings – Unappropriated |
$271,000 |
$302,700 |
|
Treasury Stock, At Cost |
($15,000) |
($8,000) |
|
$705,000 |
$611,700 |
|
For 2009 Year
|
Net Income |
$58,300 |
|
Depreciation Expense |
$19,000 |
|
Amortization of Patents |
$5,000 |
|
Cash Dividends Declared and Paid |
$20,000 |
|
Gain Or Loss On Sale of Patents |
None |
Directions (20 Points):
Given the above information, prepare a statement of cash flows for Doug Corporation for the year 2009 on a separate Excel spreadsheet as directed on the Problem Set 1 directions.
Problem 5
The net changes in the balance sheet accounts of Lenon, Inc. for the year 2008 are shown below:
Account Debit Credit
Cash $ 125,600
Accounts receivable $ 64,000
Allowance for doubtful accounts 14,000
Inventory 217,200
Prepaid expenses 20,000
Long-term investments 144,000
Land 300,000
Buildings 600,000
Machinery 100,000
Office equipment 28,000
Accumulated depreciation:
Buildings 24,000
Machinery 20,000
Office equipment 12,000
Accounts payable 183,200
Accrued liabilities 72,000
Dividends payable 128,000
Premium on bonds 32,000
Bonds payable 800,000
Preferred stock ($50 par) 60,000
Common stock ($10 par) 156,000
Additional paid-in capital—common 223,200
Retained earnings 87,200
$1,705,200 $1,705,200
Additional information:
1. Net income for the year was $140,000.
2. Cash dividends of $128,000 were declared December 15, 2008, payable January 15, 2009. A 5% stock dividend was issued March 31, 2008, when the market value was $22 per share.
3. The long-term investments were sold for $140,000.
4. A building and land which cost $480,000 and had a book value of $300,000 were sold for $400,000. The cost of the land, included in the cost and book value above, was $20,000.
5. The following entry was made to record an exchange of an old machine for a new one:
Machinery ………………………………………………………………………………… 160,000
Accumulated Depreciation—Machinery……………………………….. 40,000
…………………………………………………………………………………. Machinery 60,000
…………………………………………………………………………………………… Cash 140,000
6. A fully depreciated copier machine which cost $28,000 was written off.
7. Preferred stock of $60,000 par value was redeemed for $80,000.
8. The company sold 12,000 shares of its common stock ($10 par) on June 15, 2008 for $25 a share. There were 87,600 shares outstanding on December 31, 2008.
9. Bonds were sold at 104 on December 31, 2008.
Directions (20 points) Prepare a statement of cash flows. Ignore tax effects.
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