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Posted: December 28th, 2022
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
receivableâdebit balances $60,000;
(b) accounts receivableâcredit 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
capitalâcommon 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
DepreciationâMachinery……………………………….. 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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