Prepare journal entries to record the issuance of 100,000 shares of common stock at $20 per share for each of the following independent cases:
CHAPTER2 EXERCISE 1:
Issuance of stock
Prepare journal entries to record the issuance of 100,000 shares of common
stock at $20 per share for each of the following independent cases:
- Jackson Corporation has common stock with a par value of
$1 per share.
- Royal Corporation has no-par common with a stated value of $5 per share.
- French Corporation has no-par common; no stated value has been assigned.
CHAPTER2 EXERCISE 3:
- Stock subscriptions: Journal entries
Investors recently subscribed to 5,000 shares of B&J Travel’s $1 par-value common stock at $10 per share. During the year, the company received 80% of the balances due, which resulted in the issuance of 4,000 shares of stock.- Prepare journal entries to record
1) the subscriptions to investors.
2) the receipt of cash from subscribers.
3) the issuance of shares.
- Determine the year-end balance in the Common Stock Subscribed account.
- Determine the year-end balance in the Common Stock Subscriptions Receivable account.
- Prepare journal entries to record
CHAPTER2 PROBLEM 3:
- Bond computations: Straight-line amortization
Southlake Corporation issued $900,000 of 8% bonds on March 1, 20X1. The bonds pay interest on March 1 and September 1 and mature in 10 years. Assume the independent cases that follow:- Case A—The bonds are issued at 100.
- Case B—The bonds are issued at 96.
- Case C—The bonds are issued at 105.
Southlake uses the straight-line method of amortization.
Instructions
Complete the following table:
Case A | Case B | Case C | ||
a. | Cash inflow on the issuance date | ________ | ________ | ________ |
b. | Total cash outflow through maturity | ________ | ________ | ________ |
c. | Total borrowing cost over the life of the bond issue | ________ | ________ | ________ |
d. | Interest expense for the year ended December 31, 20X1 | ________ | ________ | ________ |
e. | Amortization for the year ended December 31, 20X1 | ________ | ________ | ________ |
f. | Unamortized premium or unamoratized discount as of December 31, 20X1 if any | ________ | ________ | ________ |
g. | Bond carrying value as of December 31, 20X1 |
CHAPTER3 EXERCISE 4:
- Basic manufacturing computations
Lyon Manufacturing reported total manufacturing costs (direct materials used, direct labor, and factory overhead) of $549,000 for 20X3. Sales and operating expenses were $759,200 and $142,500, respectively. The following information appeared on company balance sheets:
For the Year Ended | ||
12/31/X3 | 12/31/X2 | |
Finished goods | $150,000 | $153,700 |
Work in process | 86,400 | 74,100 |
- Compute cost of goods manufactured, cost of goods sold, and net income for 20X3.
CHAPTER3 PROBLEM2:
- Straightforward manufacturing statements
The following information was extracted from the accounting records of Olympic Company for the year just ended:
Sales | $628,000 |
Work in process, Jan. 1 | 56,700 |
Advertising expense | 23,500 |
Direct material purchases | 231,500 |
Finished goods, Dec. 31 | 67,800 |
Indirect materials used | 12,300 |
Direct labor | 85,600 |
Direct materials, Jan. 1 | 45,500 |
Finished goods, Jan. 1 | 55,900 |
Direct materials, Dec. 31 | 38,200 |
Sales staff salaries | 33,300 |
Work in process, Dec. 31 | 47,400 |
Indirect labor | 50,700 |
- Utilities, taxes, insurance, and depreciation are incurred jointly by Olympic’s manufacturing, sales, and administrative facilities. The costs were as follows:
Utilities | $40,000 |
Taxes | 25,000 |
Insurance | 10,000 |
Depreciation | 36,000 |
- The first three costs are allocated proportionately on the basis of square feet occupied by the three functional areas. A review of the company’s facilities revealed the following percentages would be appropriate: manufacturing, 50%; sales, 30%; and administrative, 20%. Depreciation is allocated 70, 20, and 10%, respectively.
- Instructions
- Prepare a schedule of cost of goods manufactured in good form.
- Prepare an income statement in good form.