Chapter 1. Fulton Company
Fulton Company was established at the beginning of 2014 when several investors paid a total of $200,000 to purchase Fulton common stock. No additional investments in common stock were made during the year. By December 31, 2014, Fulton had cash on hand of $45,000, office equipment of $40,000, inventory of $156,000, and accounts payable of $10,000. Sales for the year were $812,000. Of this amount, customers still owed $20,000. Fulton paid dividends of $25,000 to its stockholders during 2014.
1. Based on the information above, prepare a balance sheet for Fulton Company as of December 31, 2014. In the process of preparing the balance sheet, you must calculate the ending balance in retained earnings.
2. Prepare a statement of stockholders' equity for the year ended December 31, 2014.
3. What was the amount of Fulton's net income for 2014?
4. Was Fulton successful during its first year in operation? Explain your answer.
Chapter 2. The Lake Company
The Lake Company has provided the following account balances:
Short-term investments $8,000;
Accounts receivable $96,000;
Long-term notes receivable $4,000;
Factory Building $360,000;
Intangible assets $12,000;
Accounts payable $90,000;
Accrued liabilities payable $12,000;
Short-term notes payable $42,000;
Long-term notes payable $184,000.
What is Lake's current ratio?
Chapter 2. The Superior Company
The Superior Company has provided the following account balances:
Short-term investments $18,000;
Accounts receivable $36,000;
Long-term notes receivable $44,000;
Factory Building $270,000;
Intangible assets $33,000;
Accounts payable $130,000;
Accrued liabilities payable $19,000;
Short-term notes payable $84,000;
Long-term notes payable $169,000.
What is Superior's stockholders' equity?
Chapter 2. The Smith Corporation
The Smith Corporation has provided the following information:
Cash dividend payments were $25,000.
Long-term investments were sold for $79,000 cash.
A building costing $198,000 was purchased using $19,800 cash, and the balance was financed with a mortgage note payable.
Stock was issued to stockholders in exchange for $110,000 cash.
A $44,000 loan was made to a local inventory supplier; the loan will be repaid in twelve months.
Equipment used in operations was sold for $37,000.
Shares of Smith Corporation stock were acquired (repurchased) from stockholders for $92,000 cash.
Cash received from bank loans totaled $71,000.
Land costing $57,000 was purchased in exchange for a long-term note payable.
Determine Smith's cash flows to be reported on the statement of cash flows for 1. investing activities, and 2. financing activities
Chapter 3. Carthage Enterprises
The following accounts for Carthage Enterprises, Inc. are listed randomly. Enter the number associated with each transaction to identify the accounts that would be used in the journal entry for each transaction given below.
Chapter 4. Lane Company
Lane Company is completing the accounting cycle at the end of its annual accounting period, December 31, 2014. Adjusting entries have not been made during the year so three adjusting entries must be made to update the accounts. The following accounts, selected from the company's chart of accounts, are to be used for this purpose. They are coded to the left of each title for easy reference.
Indicate the appropriate account code and amount for each of the required adjusting entries at December 31, 2014.
Chapter 4. Johnson Corporation
Johnson Corporation is completing the accounting information processing cycle at the end of the fiscal year, June 30, 2014. Johnson has provided the following trial balances as of June 30, 2014:
A. Reconstruct the adjusting entries and give a brief explanation of each.
B. What is the amount of net income?
C. Calculate earnings per share (EPS) assuming 1,000 shares of common stock are outstanding.
D. Prepare the closing entries.
E. Prepare a post-closing Trial Balance.
Chapter 5. Kent Corporation
The following data were taken from the adjusted trial balance of Kent Corporation.
A. Prepare a classified balance sheet in good form at December 31, 2014. (Ignore income taxes).
B. Compute the current ratio.
C. Compute the debt to equity ratio.
Chapter 6. Colonial Corporation
On December 31, 2014, Colonial Corporation had the following account balances related to credit sales and receivables prior to recording adjusting entries:
Prepare the necessary year-end adjusting entry related to uncollectible accounts for each of the following independent assumptions:
A. An aging of accounts receivable is completed. It is estimated that $2,150 of the receivables outstanding at year-end will be uncollectible.
B. Assume the same information presented in part A. except that prior to adjustment, the allowance for doubtful accounts had a debit balance of $200 rather than a credit balance of $200.
C. It is estimated that a provision for bad debts is required for 1% of credit sales for the year.
Chapter 6. American Company
On January 1, American Company's allowance for doubtful accounts had a credit balance of $3,000. The balance in the Accounts Receivable account on that date was $75,000. On January 2, prior to any credit sales, a $500 account from National Company was deemed to be uncollectible and written off.
A. Compute the net realizable value of American's receivables on January 1.
B. Prepare the journal entry American would record on January 2 related to the write-off of National's account.
C. Compute the net realizable value of American's receivables on January 2, immediately following the write-off of National's account.