Chapter 22 End-of-Fiscal-Period Work for a Corporation • 703
Statement of Stockholders’ Equity
Capital Stock—Common:
$5.00 Par Value
January 1, 20–, 2,000 Shares Issued
Capital Stock—Preferred:
$10.00 Par Value, 5%
January 1, 20–, 0 Shares Issued
Issued during Current Year, 1,000 Shares
Balance, December 31, 20–, 1,000 Shares Issued
Retained Earnings:
Balance, January 1, 20–
22-2 ON YOUR OWN (continued)
2.
Williams Corporation
For Year Ended December 31, 20–
10 0 0 0 00
10 0 0 0 00
10 0 0 0 00
20 0 7 1 08
704 • Working Papers
22-2 ON YOUR OWN (concluded)
3.
Balance Sheet
Assets
Current Assets:
Cash
Petty Cash
Supplies
Prepaid Insurance
Total Current Assets
Plant Assets:
Equipment
Less Accumulated Depreciation—Equipment
Total Plant Assets
Total Assets
Liabilities
Current Liabilities:
Employee Income Tax Payable
Social Security Tax Payable
Medicare Tax Payable
Medical Insurance Payable
Unemployment Tax Payable—State
Unemployment Tax Payable—Federal
Federal Income Tax Payable
Dividends Payable
Total Current Liabilities
Long-term Liabilities:
Bonds Payable
Total Long-term Liabilities
Total Liabilities
Stockholders’ Equity
TE
Williams Corporation
December 31, 20–
8 4 2 7 05
1 5 0 00
4 0 1 25
6 0 0 00
150 1 0 0 04
49 5 3 6 38
26 5 2 8 25
23 0 0 8 13
173 1 0 8 17
1 1 2 8 00
1 0 6 0 67
2 5 6 33
3 3 6 00
1 4 6 40
2 2 80
1 1 5 4 65
2 5 0 0 00
29 4 8 7 50
15 0 0 0 00
15 0 0 0 00
44 4 8 7 50
Chapter 22 End-of-Fiscal-Period Work for a Corporation • 705
Statement of Cash Flows
Name Date Class
22-3 WORK TOGETHER, p. 698
Preparing a statement of cash flows for a corporation
Travel Lite Corporation
For Year Ended December 31, 20–
Cash ows from operating activities:
Cash receipts from:
Sales 598 2 3 6 31
Insurance (4 2 5 4 35)
Interest (1 5 8 7 35)
Taxes (12 8 8 5 00)
Rent (16 2 4 8 65)
Other operating expenses (95 4 1 2 88)
Total cash payments (591 81891)
Net cash provided/(used) by operating activities 11 0 5 2 61
Cash ows from financing activities:
Issuance of stock 17 5 0 0 00
Issuance of bonds 10 0 0 0 00
Payment of notes payable (2 5 0 0 00)
Payment of cash dividends (21 2 0 0 00)
706 • Working Papers
Statement of Cash Flows
22-3 ON YOUR OWN, p. 699
Preparing a statement of cash flows for a corporation
TE
Williams Corporation
For Year Ended December 31, 20–
Cash ows from operating activities:
Cash receipts from:
Cash payments for:
Inventory purchases (805 4 1 2 20)
Salaries and wages (220 1 4 7 25)
Insurance (8 2 0 0 00)
Interest (9 1 5 00)
Taxes (28 0 0 0 00)
Rent (28 2 1 0 00)
Other operating expenses (95 2 1 4 20)
Total cash payments (1186 09865)
Net cash provided/(used) by operating activities 53 7 0 3 76
Cash ows from financing activities:
Issuance of stock 18 0 0 0 00
Issuance of bonds 10 0 0 0 00
Payment of notes payable (7 5 0 0 00)
Payment of cash dividends (10 0 0 0 00)
Chapter 22 End-of-Fiscal-Period Work for a Corporation • 707
Name Date Class
22-4 WORK TOGETHER, p. 706
Journalizing closing and reversing entries for a corporation
1.
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF. DEBIT CREDIT
1 1
2 2
3 3
4 4
5 5
6 6
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
13
Closing Entries
20–
Dec. 31 Sales 587 9 3 4 15
Purchases Discount 2 7 4 1 80
Purchases Returns and Allowances 1 3 5 8 07
Interest Income 5 8 4 74
Rent Income 1 0 0 0 00
Advertising Expense 7 9 7 3 50
Cash Short and Over 4 58
Credit Card Fee Expense 5 0 3 3 47
Depreciation Expense—Equipment 2 2 5 0 00
Insurance Expense 3 0 0 0 00
Miscellaneous Expense 4 3 4 1 10
Payroll Taxes Expense 7 4 8 3 00
Rent Expense 14 4 5 7 50
708 • Working Papers
22-4 WORK TOGETHER (concluded)
2.
GENERAL JOURNAL PAGE 14
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF. DEBIT CREDIT
1 1
2 2
3 3
9 9
10 10
11 11
12 12
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
30 30
31 31
32 32
TE
Reversing Entries
20–
Jan. 1Interest Income 1 3 7 50
Interest Receivable 1 3 7 50
Chapter 22 End-of-Fiscal-Period Work for a Corporation • 709
Name Date Class
22-4 ON YOUR OWN, p. 706
Journalizing closing and reversing entries for a corporation
1.
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF. DEBIT CREDIT
1 1
2 2
3 3
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
Closing Entries
20–
Dec. 31 Sales 1282 2 4 1 65
Purchases Discount 3 9 4 5 59
Advertising Expense 19 0 5 7 10
Cash Short and Over 7 66
Credit Card Fee Expense 9 0 6 1 05
Depreciation Expense—Equipment 7 3 4 5 00
Insurance Expense 7 3 0 0 00
Miscellaneous Expense 14 7 4 2 63
Payroll Taxes Expense 16 0 7 4 12
Rent Expense 27 0 0 0 00
13
22-4 ON YOUR OWN (concluded)
2.
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF. DEBIT CREDIT
1 1
2 2
3 3
4 4
5 5
9 9
10 10
11 11
12 12
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
22 22
Reversing Entries
20–
Jan. 1Interest Income 8 0 00
Interest Receivable 8 0 00
1Interest Payable 1 5 0 00
14
Chapter 22 End-of-Fiscal-Period Work for a Corporation • 711
Name Date Class
22-1 APPLICATION PROBLEM (LO1), p. 709
Recording adjusting entries and preparing an adjusted trial balance
Handy Hardware Corporation
Unadjusted Trial Balance
December 31, 20–
ACCOUNT TITLE DEBIT CREDIT
Cash 37 6 9 7 16
Petty Cash 2 0 0 00
Accounts Receivable 114 3 7 5 60
Allowance for Uncollectible Accounts 1 3 2 96
Equipment 88 3 7 1 20
Accumulated Depreciation—Equipment 26 7 1 8 00
Accounts Payable 16 7 4 5 60
Sales Tax Payable 5 6 9 4 00
Notes Payable 60 0 0 0 00
Interest Payable
Unearned Rent Income 12 0 0 0 00
Employee Income Tax Payable 2 9 7 2 60
Social Security Tax Payable 2 4 1 9 62
Medicare Tax Payable 5 5 8 38
Medical Insurance Payable 6 9 7 60
(Note: Unadjusted trial balance is continued on next page.)
22-1 APPLICATION PROBLEM (continued)
Handy Hardware Corporation
Unadjusted Trial Balance (Concluded)
December 31, 20–
ACCOUNT TITLE DEBIT CREDIT
Paid-in Capital in Excess of Par—Preferred
Purchases Discount 8 4 3 1 00
Purchases Returns and Allowances 3 6 9 6 94
Advertising Expense 18 9 6 7 60
Cash Short and Over 2 0 40
Credit Card Fee Expense 16 9 6 5 80
Depreciation Expense—Equipment
Insurance Expense
Interest Income 4 5 4 00
Rent Income
Gain on Plant Assets 1 4 3 0 00
Interest Expense 6 3 1 6 80
Loss on Plant Assets 3 6 8 00
Totals 2299 7 1 9 96 2299 7 1 9 96
Chapter 22 End-of-Fiscal-Period Work for a Corporation • 713
Name Date Class
22-1 APPLICATION PROBLEM (continued)
1., 4., 5.
GENERAL JOURNAL PAGE 12
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF. DEBIT CREDIT
1 1
2 2
3 3
10 10
11 11
12 12
13 13
14 14
15 15
Adjusting Entries
20–
Dec. 31 Uncollectible Accounts Expense 13 7 0 0 00
Allowance for Uncollectible Accounts 13 7 0 0 00
31 Insurance Expense 9 5 3 6 00
Prepaid Insurance 9 5 3 6 00
31 Depreciation Expense—Equipment 13 0 3 4 00
Accumulated Depreciation—Equipment 13 0 3 4 00
31 Interest Expense 6 0 0 00
Interest Payable 6 0 0 00
Adjusted Trial Balance amounts:
Total of Income Statement Credit amounts, including Income Summary, $1,991,169.34
Total of Income Statement Debit amounts, $1,840,941.40
Net Income before Federal Income Tax: $1,991,169.34 2 $1,840,941.40 5 $150,227.94
Federal Income Tax from table on page 680 in text:
714 • Working Papers
22-1 APPLICATION PROBLEM (continued)
2., 5.
Income Summary
Depreciation Expense—Equipment
Allowance for Uncollectible Accounts
Balance 132.96
Balance 13,832.96
Interest Receivable
TE
13,700.00
Adjustment
630.00
Adjustment
Adjustment
Adjustment
4,853.00
13,034.00
Chapter 22 End-of-Fiscal-Period Work for a Corporation • 715
Name Date Class
Prepaid Insurance
Balance 17,896.00
Balance 8,360.00
Accumulated Depreciation—Equipment
Balance 26,718.00
Balance 39,752.00
Uncollectible Accounts Expense
Federal Income Tax Expense
Balance 24,000.00
Balance 41,838.90
22-1 APPLICATION PROBLEM (continued)
9,536.00
13,034.00
Adjustment
Adjustment
Adjustment
Adjustment
13,700.00
17,838.90
716 • Working Papers
22-1 APPLICATION PROBLEM (continued)
3., 6.
Adjusted Trial Balance
ACCOUNT TITLE DEBIT CREDIT
Cash 37 6 9 7 16
Petty Cash 2 0 0 00
Accounts Receivable 114 3 7 5 60
Equipment 88 3 7 1 20
Accumulated Depreciation—Equipment
Accounts Payable 16 7 4 5 60
Sales Tax Payable 5 6 9 4 00
Notes Payable 60 0 0 0 00
Interest Payable
Unearned Rent Income
Dividends Payable 10 0 0 0 00
Bonds Payable 18 0 0 0 00
Capital Stock—Common 20 0 0 0 00
Paid-in Capital in Excess of Par—Common 50 0 0 0 00
Capital Stock—Preferred 30 0 0 0 00
(Note: Adjusted trial balance is continued on next page.)
TE
Handy Hardware Corporation
December 31, 20–
39 7 5 2 00
6 0 0 00
8 0 0 0 00
Chapter 22 End-of-Fiscal-Period Work for a Corporation • 717
Name Date Class
22-1 APPLICATION PROBLEM (concluded)
Adjusted Trial Balance (Concluded)
ACCOUNT TITLE DEBIT CREDIT
Paid-in Capital in Excess of Par—Preferred
Retained Earnings 61 6 4 6 36
Dividends 40 0 0 0 00
Advertising Expense 18 9 6 7 60
Cash Short and Over 2 0 40
Credit Card Fee Expense 16 9 6 5 80
Depreciation Expense—Equipment
Insurance Expense
Miscellaneous Expense 18 3 6 9 60
Rent Income
Gain on Plant Assets 1 4 3 0 00
Interest Expense
Loss on Plant Assets 3 6 8 00
Handy Hardware Corporation
December 31, 20–
13 0 3 4 00
9 5 3 6 00
4 0 0 0 00
6 9 1 6 80
Totals 2350 3 7 5 86 2350 3 7 5 86
718 • Working Papers
22-2 APPLICATION PROBLEM (LO2, 3, 4), p. 709
Preparing an income statement, statement of stockholders’ equity, and balance sheet for a
corporation
1.
Income Statement
% OF
SALES
Less: Purchases Discount
Purchases Returns and Allowances
Net Purchases
Total Cost of Merchandise Available for Sale
Less Merchandise Inventory, December 31, 20–
Cost of Merchandise Sold
Gross Profit
Operating Expenses:
Rent Expense
Repairs Expense
Salary Expense
Supplies Expense
Uncollectible Accounts Expense
Utilities Expense
Total Operating Expenses
Income from Operations
Other Revenue:
Interest Income
Rent Income
Gain on Plant Assets
TE
Handy Hardware Corporation
For Year Ended December 31, 20–
8 4 3 1 00
3 6 9 6 94 12 1 2 7 94
1382 5 0 9 06
1540 2 2 5 06
162 5 6 9 00
1377 6 5 6 06 70.48
577 0 6 2 34 29.52
30 0 0 0 00
8 2 0 9 60
250 9 6 6 40
6 2 8 0 40
13 7 0 0 00
14 3 1 7 80
426 0 6 3 60 21.80
150 9 9 8 74 7.72
1 0 8 4 00
4 0 0 0 00
1 4 3 0 00
Chapter 22 End-of-Fiscal-Period Work for a Corporation • 719
Name Date Class
Statement of Stockholders’ Equity
Capital Stock—Common:
$1.00 Par Value
January 1, 20–, 15,000 Shares Issued
Issued during Current Year, 5,000 Shares
Balance, December 31, 20–, 20,000 Shares Issued
Capital Stock—Preferred:
$30.00 Par Value, 5%
January 1, 20–, 0 Shares Issued
Issued during Current Year, 1,000 Shares
Balance, December 31, 20–, 1,000 Shares Issued
Retained Earnings:
22-2 APPLICATION PROBLEM (continued)
2.
Handy Hardware Corporation
For Year Ended December 31, 20–
15 0 0 0 00
5 0 0 0 00
20 0 0 0 00
30 0 0 0 00
30 0 0 0 00
720 • Working Papers
Balance Sheet
Assets
Current Assets:
Cash
Plant Assets:
Equipment
Less Accumulated Depreciation—Equipment
Total Plant Assets
Total Assets
Liabilities
Current Liabilities:
Medicare Tax Payable
Medical Insurance Payable
Unemployment Tax Payable—State
Unemployment Tax Payable—Federal
Federal Income Tax Payable
Dividends Payable
Total Current Liabilities
Long-term Liabilities:
Bonds Payable
Total Long-term Liabilities
Total Liabilities
22-2 APPLICATION PROBLEM (concluded)
3.
TE
Handy Hardware Corporation
December 31, 20–
37 6 9 7 16
88 3 7 1 20
39 7 5 2 00
48 6 1 9 20
374 0 1 0 60
5 5 8 38
6 9 7 60
3 9 0 00
5 8 50
17 8 3 8 90
10 0 0 0 00
125 9 7 5 20
18 0 0 0 00
18 0 0 0 00
143 9 7 5 20
Chapter 22 End-of-Fiscal-Period Work for a Corporation • 721
Name Date Class
Statement of Cash Flows
22-3 APPLICATION PROBLEM (LO5), p. 709
Preparing a statement of cash flows for a corporation
Handy Hardware Corporation
For Year Ended December 31, 20–
Cash ows from operating activities:
Cash receipts from:
Cash payments for:
Inventory purchases (1371 2 5 4 10)
Salaries and wages (262 9 5 4 25)
Insurance (18 5 0 0 00)
Interest (7 0 5 0 00)
Taxes (25 6 5 0 00)
Rent (30 0 0 0 00)
Other operating expenses (171 5 0 1 54)
Total cash payments (1886 91039)
Net cash provided/(used) by operating activities 51 1 8 6 55
Cash ows from financing activities:
Issuance of stock 65 0 0 0 00
Issuance of bonds 8 0 0 0 00
Payment of notes payable (20 0 0 0 00)
Payment of cash dividends (40 0 0 0 00)
22-4 APPLICATION PROBLEM (LO6, 7), p. 710
Journalizing closing and reversing entries for a corporation
1.
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
POST.
6 6
7 7
8 8
9 9
10 10
11 11
12 12
13 13
14 14
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
TE
Interest Income 1 0 8 4 00
Rent Income 4 0 0 0 00
Gain on Plant Assets 1 4 3 0 00
Income Summary 1986 3 1 6 34
31 Income Summary 1882 7 8 0 30
Sales Discount 3 7 8 9 00
Sales Returns and Allowances 9 1 6 7 00
Purchases 1394 6 3 7 00
Advertising Expense 18 9 6 7 60
Cash Short and Over 2 0 40
Rent Expense 30 0 0 0 00
Repairs Expense 8 2 0 9 60
Salary Expense 250 9 6 6 40
Supplies Expense 6 2 8 0 40
Uncollectible Accounts Expense 13 7 0 0 00
Utilities Expense 14 3 1 7 80
Federal Income Tax Expense 41 8 3 8 90
Interest Expense 6 9 1 6 80
Loss on Plant Assets 3 6 8 00
31 Income Summary 108 3 8 9 04
13