2024 – Magee Corporation provided the following summary balance sheet information Dec 31 20X1 Dec 31 20X2 Total assets 1 500 000
Calculations Shown – 2024
Magee Corporation provided the following summary balance sheet information:
Dec. 31, 20X1 Dec. 31, 20X2
Total assets $1,500,000 $2,300,000
Total liabilities 700,000 1,400,000
Compute net income for the year ending December 31, 20X2, under each of the following independent scenarios:
(a) Magee paid no dividends, and no additional capital was raised via share issuances.
(b) Magee paid $100,000 in dividends, and no additional capital was raised via share issuances.
(c) Magee paid no dividends, but raised $250,000 via issuances of additional shares of stock.
(d) Magee paid $100,000 in dividends, and raised $250,000 via issuances of additional shares of stock.
Mo Lambert formed a corporation to provide concrete construction work. His jobs typically involve building parking lots, drives, and foundations. Mo provided the following information about transactions occurring during the first month of operation. Evaluate the transactions and prepare journal entries for this activity.
Jan. 2, 20X5 Mo Lambert invested $10,000 cash in the capital stock of the newly formed corporation.
Jan. 4, 20X5 Purchased equipment on account for $7,500.
Jan. 12, 20X5 Received $15,000 from customers for services rendered.
Jan. 15, 20X5 Received a bill for construction supplies used in the amount of $2,000.
Jan. 18, 20X5 Provided $3,200 of services on account.
Jan. 20, 20X5 Paid employees $2,300 for wages earned.
Jan. 22, 20X5 Collected 60% of the amount due for the work provided on January 18.
Jan. 23, 20X5 Paid 40% of the amount due on the equipment purchased on January 4.
Jan. 25, 20X5 Purchased (and immediately used) construction supplies for cash in the amount of $600.
Jan. 31, 20X5 The company paid Mo Lambert a $1,500 dividend.
Indicate the impact (increase/decrease/no change) for each of the following transactions on total assets, liabilities, and owners’ equity. The first one is done as an example on the blank worksheet.
(a) Paid the current month’s rent.
(b) Provided services to customers for cash.
(c) Provided services to customers on account.
(d) Recorded receipt of an electric bill to be paid next month.
(e) Paid an electric bill received in a prior month.
(f) Purchased land for cash.
(g) Purchased equipment in exchange for a note payable (loan).
(h) Collected a previously recorded account receivable.
(i) Purchased a building by paying 20% in cash and agreeing to pay the remainder over future years.
(j) Declared and paid a dividend to shareholders.
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