*PROBLEM 11-8A
(a) Jan. 15 Cash Dividends (70,000 X $0.50) …… 35,000
Dividends Payable …………………. 35,000
Feb. 15 Dividends Payable ……………………….. 35,000
Cash ……………………………………… 35,000
Dividends Payable …………………. 46,200
31 Income Summary …………………………. 400,000
Retained Earnings …………………. 400,000
(b)
Common Stock
Retained Earnings
1/1 Bal. 700,000
12/31 98,000
1/1 Bal. 620,000
5/15 70,000
12/31 81,200
12/31 400,000
12/31 Bal. 770,000
12/31 Bal. 840,800
Paid-in Capital
in Excess of Par Value
Common Stock
Dividends Distributable
1/1 Bal. 500,000
5/15 70,000
4/15 70,000
4/15 28,000
12/31 Bal. –0–
12/31 Bal. 528,000
1/15 35,000
4/15 98,000
12/1 46,200
12/31 98,000
(c) TACOMA CORPORATION
Partial Balance Sheet
December 31, 2017
Stockholders’ equity
Paid-in capital
Capital stock
*PROBLEM 11-8A (Continued)
(d)
$81,200
Payout ratio = = 20.3%
$400,000
ACR 11-1 ACCOUNTING CYCLE REVIEW
(a)
1.
Paid-in Capital in Excess
Cash ………………………………………………………..
49,200
2.
Cash ………………………………………………………..
21,000
3.
Accounts Receivable ………………………………..
Service Revenue ………………………………..
320,000
320,000
4.
Cash ………………………………………………………..
Unearned Service Revenue ………………..
36,000
36,000
5.
Cash ………………………………………………………..
Accounts Receivable …………………………
276,000
276,000
7.
Accounts Payable …………………………………….
Cash ………………………………………………….
32,200
32,200
8.
Treasury Stock ………………………………………..
Cash ………………………………………………….
9.
Cash ………………………………………………….
Cash Dividends ($3,360 + $10,200*) ……………
Dividends Payable ……………………………..
Other Operating Expenses ………………………..
188,200
11.
Allowance for Doubtful Accounts ………………
1,700
ACR 11-1 (Continued)
1.
Supplies Expense ($4,400 + $35,100 – $5,900) ..
Supplies ……………………………………………..
33,600
3.
Bad Debts Expense [$3,500 – ($1,500 – $1,700)] …
Allowance for Doubtful Accounts …………
3,700
3,700
4.
Accumulated Depreciation—Buildings
4,400
Depreciation Expense …………………………………
4,400
5.
Income Tax Expense …………………………………..
Income Taxes Payable …………………………
35,130*
35,130
(b) HAWKEYE CORPORATION
Adjusted Trial Balance
12/31/17
Account
Debit
Credit
Cash …………………………………………………………….
$175,200
Accounts Receivable …………………………………….
87,800
Allowance for Doubtful Accounts ………………….
Supplies ……………………………………………………….
Land …………………………………………………………….
40,000
Buildings ………………………………………………………
Accumulated Depreciation—Buildings …………..
26,400
Accounts Payable …………………………………………
28,500
Income Taxes Payable …………………………………..
35,130
Unearned Service Revenue …………………………...
9,000
Dividends Payable ………………………………………..
13,560
Preferred Stock …………………………………………….
48,000
Paid-in Capital in Excess of Par Value—P.S. ….
1,200
Common Stock ……………………………………………..
89,000
12,000
Retained Earnings ………………………………………..
Cash Dividends …………………………………………….
13,560
Treasury Stock …………………………………………….
Service Revenue …………………………………………..
Bad Debt Expense ………………………………………..
Depreciation Expense …………………………………..
Supplies Expense …………………………………………
33,600
Other Operating Expenses …………………………….
ACR 11-1 (Continued)
(c) Optional T Accounts
Cash
276,000
Bal. 175,200
Bal. 26,400
Bal. 28,500
Bal. 24,600
49,200
32,200
11,200
Accounts Receivable
Bal. 45,500
320,000
276,000
1,700
Bal. 87,800
1,700
Bal. 1,500
3,700
Bal. 3,500
27,000
36,000
Bal. 9,000
13,560
35,100
Bal. 5,900
Land
Bal. 40,000
Bal. 142,000
1,200
Accum. Depreciation—Buildings
Bal. 22,000
4,400
Income Taxes Payable
35,130
Preferred Stock
48,000
ACR 11-1 (Continued)
(c) (Continued)
Common Stock
3,700
Bal. 89,000
Paid-in Capital in Excess
of Par Value—C.S.
12,000
Retained Earnings
Bal. 127,400
13,560
188,200
35,130
Treasury Stock
11,200
Service Revenue
Bal. 347,000
Bad Debt Expense
Depreciation Expense
4,400
Supplies Expense
33,600
Other Operating Expenses
ACR 11-1 (Continued)
(c) HAWKEYE CORPORATION
Income Statement
For the Year ending December 31, 2017
Service revenue ………………………………………
$347,000
Operating expenses
Other operating expenses …………………
$188,200
Supplies expense …………………………..
33,600
Depreciation expense ……………………….
Bad debt expense …………………………..
Total operating expenses …………………………
Income before taxes ………………………………..
Income tax expense ………………………….
35,130
Net income ………………………………………………
HAWKEYE CORPORATION
Statement of Retained Earnings
For the Year ending December 31, 2017
Retained earnings, 1/1/17 …………………………..…………
$127,400
Add: Net income ………………………………………………..
81,970
Less: Dividends ………………………………………………….
13,560
Retained earnings, 12/31/17 ………………………………….
$195,810
ACR 11-1 (Continued)
HAWKEYE CORPORATION
Balance Sheet
At December 31, 2017
Assets
Current assets
Cash ……………………………………………………..
$175,200
Accounts receivable …………………………..
$ 87,800
Less: Allowance for doubtful accounts ………….
Supplies ………………………………………………..
Total current assets ………………………….
Property, plant, and equipment
Land ………………………………………………………
Buildings ……………………………………………….
Less: Accumulated depreciation Bldg. …………..
115,600
Total assets ………………………………………………….
$421,000
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable ………………………………….
$ 28,500
Income taxes payable …………………………..
35,130
Dividends payable ………………………………….
Unearned service revenue ……………………..
9,000
Total current liabilities …………………………………..
$ 86,190
Paid-in capital
Capital stock
Preferred stock…………………………..
Common stock …………………………..
Total capital stock …………………….
Additional paid-in capital
Paid-in capital in excess of
par value—preferred stock ………..
1,200
Paid-in capital in excess of
par value—common stock …………
12,000
Total additional paid-in capital ………..
13,200
Total paid-in capital ……………………..
Retained earnings ………………………………….
195,810
Less: Treasury stock
(400 shares) ………………………………..
ACR 11-2 ACCOUNTING CYCLE REVIEW
(a)
2017
Feb. 1
Cash …………………………………………………………..
13,000
Common Stock ……………………………………….
7,500
Paid in Capital in Excess of Par ………………
5,500
1
Cash ……………………………………………………………
8,000
Note Payable …………………………………………..
1
Equipment …………………………………………………..
9,020
Cash ……………………………………………………….
9,020
1
Utilities Expense ………………………………………….
220
Cash ……………………………………………………….
220
3
980
Accounts Payable …………………………………..
980
4
No entry ………………………………………………………
5
Prepaid Insurance ……………………………………….
2,460
Cash ……………………………………………………….
2,460
5
Cash ……………………………………………………………
3,950
Loss on Disposal of Plant Assets ………………..
250
Equipment ………………………………………………
4,200
16
Accounts Receivable …………………………………..
3,900
Service Revenue …………………………………….
3,900
17
Cash ……………………………………………………………
540
Unearned Service Revenue ……………………..
540
18
Accounts Payable ……………………………………….
300
Cash ……………………………………………………….
300
20
Treasury Stock ……………………………………………
900
Cash ……………………………………………………….
900
23
Accounts Receivable …………………………………..
4,300
Service Revenue …………………………………….
4,300
24
Salaries and Wages Expense ……………………….
3,840
Cash ……………………………………………………….
3,840
25
Cash ……………………………………………………………
2,500
Accounts Receivable ………………………………
2,500
27
Prepaid Expenses ……………………………………….
220
Cash ……………………………………………………….
220
28
Dividends ……………………………………………………
940
Cash ……………………………………………………….
ACR 11-2 (Continued)
(d)
Debit
Credit
Feb. 28
1.
Accounts Receivable ………………………………………
3,800
Service Revenue …………………………………………
3,800
2.
Allowance for Doubtful Accounts ……………………
200
Accounts Receivable …………………………………..
200
3.
Bad Debt Expense ………………………………………….
479
Allowance for Doubtful Accounts ………………..
479
4.
Depreciation Expense …………………………………….
90
Accumulated Depreciation-Equipment …………
5.
Insurance Expense …………………………………………
820
Prepaid Insurance ……………………………………….
820
6.
Supplies Expense …………………………………………..
580
Supplies ……………………………………………………..
580
7.
Unearned Service Revenue……………………………..
135
Service Revenue …………………………………………
135
8.
Salaries and Wages Expense ………………………….
1,920
Salaries and Wages Payable ……………………….
1,920
9.
Interest Expense …………………………………………….
40
Interest Payable ………………………………………….
40
Income Tax Expense ………………………………………
779
Income Taxes Payable…………………………………
779
ACR 11-2 (Continued)
(c) and (f)
Accounts
Trial Balance
Adjusted Trial Balance
Debit
Credit
Debit
Credit
Cash
$10,090
$10,090
Accounts Receivable
5,700
9,300
Allowance for Doubtful
Prepaid Expenses
220
220
Prepaid Insurance
2,460
1,640
Supplies
980
400
Equipment
4,820
4,820
90
Accounts Payable
680
Unearned Service Revenue
540
405
Salaries and Wages Payable
1,920
Interest Payable
40
Note Payable
8,000
8,000
Common Stock
7,500
7,500
Paid-in Capital in Excess of Par
5,500
5,500
Retained Earnings
Dividends
940
940
Treasury Stock
900
900
Service Revenue
8,200
Utilities Expense
220
220
Salaries and Wages Expense
3,840
5,760
Loss on Disposal of Plant
250
250
Bad Debt Expense
479
Depreciation Expense
90
Insurance Expense
820
Supplies Expense
580
Interest Expense
40
Income Tax Expense
779
Income Taxes Payable
$30,420
$37,328
$37,328
ACR 11-2 (Continued)
(h)
Debit
Credit
Feb. 28
Service Revenue ……………………………….
12,135
Income Summary …………………………..
12,135
Income Summary ………………………………
9,018
Bad Debt Expense …………………………
479
Depreciation Expense ……………………
90
Insurance Expense ………………………..
820
Supplies Expense ………………………….
580
Salaries and Wages Expense …………
Interest Expense …………………………...
Utilities Expense …………………………...
220
Loss on Disposal of Plant Assets …..
Income Tax Expense ……………………..
779
Income Summary ………………………………
3,117
Retained Earnings …………………………
Retained Earnings …………………………….
940
Dividends ………………………………………
ACR 11-2 (Continued)
(b), (e), and (h)
Cash
2/27 220
2/18 300
2/3 980
2/28 Bal. 680
2/1 8,000
2/28 Bal. 8,000
2/1 13,000
2/1 9,020
2/28 940
2/28 Bal. 10,090
Accounts Receivable
2/28 3,800
2/28 Bal. 9,300
2/3 980
2/28 580
2/28 Bal. 400
2/28 Bal. 40
2/16 3,900
2/23 4,300
2/25 2,500
2/28 200
Prepaid Insurance
2/5 2,460
2/28 820
2/28 Bal. 1,640
Prepaid Expenses
2/27 220
2/28 Bal. 220
Allowance for Doubtful Accounts
2/28 200
2/28 479
2/28 Bal. 279
2/1 9,020
2/5 4,200
2/28 Bal. 4,820
Accounts Payable
Salaries and Wages Payable
2/28 1,920
2/28 Bal. 1,920
Income Taxes Payable
2/28 779
2/28 Bal. 779
Unearned Service Revenue
2/28 135
2/17 540
2/28 Bal. 405
ACR 11-2 (Continued)
Common Stock
2/1 7,500
2/28 Bal. 7,500
2/1 5,500
2/28 Bal. 5,500
Dividends
2/28 940
2/28 940
2/28 Bal. 0
Treasury Stock
2/20 900
2/28 Bal. 900
Retained Earnings
2/28 940
2/28 3,117
2/28 Bal. 2,177
2/28 Bal. 0
Service Revenue
2/28 12,135
2/28 135
2/28 Bal. 0
2/16 3,900
2/23 4,300
ACR 11-2 (Continued)
Utilities Expense
2/1 220
2/28 220
2/28 Bal. 0
Salaries and Wages Expense
2/28 Bal. 0
2/28 820
2/28 820
2/28 Bal. 0
Depreciation Expense
2/28 90
2/28 90
2/28 Bal. 0
Bad Debt Expense
2/28 479
2/28 479
2/28 Bal. 0
Supplies Expense
2/28 580
2/28 580
2/28 Bal. 0
Interest Expense
2/28 40
2/28 40
2/28 Bal. 0
2/5 250
2/28 250
2/28 Bal. 0
2/28 779
2/28 779
2/28 Bal. 0
ACR 11-2 (Continued)
(g)
Clean Sweep
Income Statement
For the Month Ending February 28, 2017
Service revenue……………………………….
$12,135
Operating expenses:
Salaries and wages expense …………
$5,760
Utilities expense …………………………..
220
Bad debt expense …………………………
479
Depreciation expense …………………..
Insurance expense ……………………….
820
Supplies expense …………………………
Income from operations …………………..
Loss on disposal of plants assets ……
250
Interest expense ………………………………
Income before income taxes …………….
Income tax expense (20%) ……………….
Net income ………………………………………
Clean Sweep
Retained Earnings Statement
For the Month Ending February 28, 2017
Retained earnings, 2/1/17 …………………
–
Add: Net income ………………………………
Less: Dividends ………………………………
Retained earnings, 2/28/17 ……………….
ACR 11-2 (Continued)
Clean Sweep
Balance Sheet
February 28, 2017
Assets
Current assets
Cash …………………………………………………..
$10,090
Accounts receivable ……………………………..
$9,300
Less: Allowance for doubt. accounts ………
279
9,021
Prepaid expenses ………………………………..
Prepaid insurance ………………………………..
1,640
Supplies ……………………………………………..
Total current assets ………………………………….
Property, plant and equipment
Equipment …………………………………………..
4,820
Less: Accum depreciation-equipment ……..
Total Assets …………………………………………..
Liabilities and Stockholders Equity
Current liabilities ……………………………………….
Accounts payable ………………………………….
$680
Unearned service revenue ……………………..
405
Salaries and wages payable …………………..
1,920
Income tax payable ……………………………….
779
Interest payable …………………………………….
40
Total current liabilities ………………………………..
Note payable, 6% due 2/1/2019 ………………….
Total Liabilities ………………………………………….
Stockholders’ Equity
Common stock, $1.50 par ……………………..
$7,500
Paid-in capital in excess of par ………………
5,500
13,000
Retained earnings ………………………………..
15,177
Less: Treasury stock at cost ………………….
Total stockholders’ equity ………………………
Total Liabilities and Stockholders’ equity ..