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Question 2.2. (TCO 7) ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital stock:

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Question 2.2. (TCO 7) ABC Inc. was incorporated on 1/15/12. Their corporate charter authorized the following capital stock:
 Preferred Stock: 7%, par value $100 per share, 100,000 shares.
 Common Stock: $1 par value, 500,000 shares.

The following transactions occurred during the year:

1/19/12 – Issued 100,000 shares of common stock for $17 cash per share.
1/31/12 – Issued 3,000 shares of preferred stock for $115 cash per share.
11/1/12 – Repurchased 30,000 shares of common stock for $22 cash per share.
12/1/12 – Declared and paid a total dividend of $95,000. 

Required: 
1. Prepare the journal entry for each transaction listed above.
2. In your own words, explain the main differences between common and preferred stock.
(Points : 25)      
      
Question 3.3. (TCO 5) Internal Control Procedures are in place to protect the assets of every business as mentioned in the textbook and our discussions.  Of the seven internal control procedures, list five of these controls and describe how each procedure is implemented. (5 points each with 2 points for listing and 3 points for a description)(Points : 25)      
      
Question 4.4. (TCO 2) Below are the accounts of Super Pool Service, Inc. The accounts have normal balances on June 30, 2012. The accounts are listed in no particular order.Account                              Balance 
Common stock                    $5,100 
Accounts payable                $4,400 
Service revenue                   $17,100 
Land                                  $28,800 
Note payable                       $9,500 
Cash                                  $5,200 
Dividends                            $6,100 
Utilities expense                  $2,100 
Accounts receivable             $10,600 
Delivery expense                 $700 
Retained earnings                $25,600 
Salary expense                    $8,200Prepare the company’s trial balance as of June 30, 2012, listing accounts in proper sequence, as illustrated in the chapter. For example, Accounts Receivable comes before Land. List the expense with the largest balance first, the expense with the next largest balance second, and so on.(Points : 25)      
      
Question 5.5.(TCO 4) Linda’s Lampshades started business on Jan. 1, 2001. They had the following inventory transactions:Journals – Jan. 2001PurchasesSupplier         Date Received         Quantity        Unit Cost       AmountDonna           01/10/01                110              12.00            1320.00Thomas         01/15/01                160              14.00             2240.00Cindy            01/18/01                150              15.00            2250.00SalesCustomer      Date shipped    Quantity      Sel. Price                Amount         Norilene        01/16/01         200                  25.00                   5000.00

1.    Calculate the ending inventory, using the perpetual inventory method: 

A.     Using FIFO

B.     Using LIFOC.     Using Average Cost2.    Prepare the following statement             

Using                                      FIFO    LIFO        Average CostSalesCost of Sales          

Gross Profit(Points : 25)

I need you to  do the following 10 questions only if you are able to do in 2 hours, no more than that. Make sure you do not plagiarize as well. 

1. (TCO 3) Adjusting entries are required at the end of the period for some accounts. (1) Explain why this process is required (15 points) and (2) develop the adjusting entry at the end of the period for salary payable to employees $2400 (10 points). (Points : 25)      
      
Question 2.2. (TCO 2) Explain how accounts are listed in the trial balance and the importance of the trial balance in preparing financial statements (10 points) and (2) Prepare a trial balance form the following accounts. List the accounts in the proper order.(10 points) Accrued liabilities $10 Revenue $190 Accounts receivable $40 Building $100 Rent expense $140 Wages payable $30 Stockholders’ equity $50 (Points : 25)      
      
Question 3.3. (TCO 5) Internal Control Procedures are required to safeguard company assets and to ensure ethical operation of the business. (1) Explain how limited access can satisfy the purpose of internal control (15 points) and (2) provide an example of how this control could be implemented. (10 points) (Points : 25)      
      
Question 4.4. (TCO 4) Inventory valuation methods determine the cost of goods sold and the inventory balance. (1) Explain how the First in First out (FIFO) method is applied (15 points) and (2) provide an example of the impact that this method of inventory valuation will have on Gross Profit. (10 points) (Points : 25)      
      
Question 5.5. (TCO 1) If you want to evaluate a company’s liquidity and short-term debt paying ability, what ratio would you compute? What is the formula for that ratio? If the result of this ratio is 2, what does that tell you about the company? (Points : 25)
 
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