Assignment Project
Assignment Details: This assignment will include the three-part graded project described below and 30 multiple choice exam questions covering this lesson, Corporations and Bonds Payable and the next lesson Investments and Cash Flow.
You should complete your work for this project at this time and submit it with the exam questions (available at the Assignments tool) after your next lesson.
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
|
Noncash 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 following entries.
a. Initial deposit
b. The first year's interest
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
Part C
1. Prepare a statement of retained earnings in proper form for White Corporation for the year ended December 31, 2012, 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