Problem - B&L Landscapes, Inc. Mini Practice Part 2
Bill Graham and Larry Miller incorporated B&L Landscapes, Inc. on July 1, 2014. The business consists of lawn care and sprinkler system installations. In addition, they also sell two types of fertilizer.
Bill and Larry are concerned about ensuring a steady supply of high-quality PVC pipe for the sprinkler installations jobs they do and have come up with a plan to issue bonds to several of their family members. These funds will enable them to acquire a significant portion of the stock of a local PVC manufacturer.
At the end of July, 2015, the company has the following adjusted trial balance:
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B&L Landscapes, Inc. Adjusted Trial Balance July 31, 2015
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DEBIT
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CREDIT
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Cash
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$47,750
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|
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Accounts Receivable
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9,500
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|
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Allowance for Doubtful Accounts
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|
400
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Prepaid Insurance
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1,700
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Inventory
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59,000
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Land
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8,000
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Building
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25,000
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|
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Accumulated Depreciation - Building
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1,350
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Equipment
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42,500
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|
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Accumulated Depreciation - Equipment
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7,500
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Accounts Payable
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11,500
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Notes Payable
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45,000
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Preferred Stock
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5,000
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Common Stock
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30,000
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Retained Earnings
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92,700
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Total
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$193,450
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$193,450
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Not included in the adjusted trial balance are the following transactions that occur on July 31, 2015.
1. B&L Landscapes, Inc. issued $20,000 worth of 5%, 10 year bonds at face value.
2. B&L Landscapes, Inc. purchased 30% of the outstanding common stock of Crestline Pipe, Inc. for $40,000
Instructions:
1. Using the chart of accounts provided below, and the Excel template provided with this assignment, prepare journal entries, in good form, to record the issuance of bonds and the investment transactions. Start with Page 3 of the General Journal. Explanations are optional. Round all journal entries to two decimal places.
2. Post the entries to the general ledger provided. You only need to create ledgers for the accounts in Part 1. Record any existing account balances as beginning balances using the values from the adjusted trial balance.
3. Prepare a classified balance sheet for B&L Landscapes, Inc. for July 31, 2015.
4. On December 15, 2015, Crestline Pipe, Inc. pays a $2,000 dividend. Prepare the journal entry, in good form, to record B&L's receipt of their share of the dividend. Record this on Page 4 of the General Journal. Explanations are optional.
5. Crestline Pipe, Inc. reports total net income of $11,500 for the year ending December 31, 2015.
6. Record the necessary adjusting journal entries for B&L Landscapes, Inc. investments and bonds on Page 5 of the General Journal. Explanations are optional.
Attachment:- Assignment Files.rar