Beginning Balances as of Dec 31, Year 1 L.Acquired $550,000 by signing a note payable with a local bank 2. Sold 25,000 shares of $22 Common Stock for $1,500,000 3. Purchased Equipment for $300,000 4. Purchased Inventory on Account - 25,000 Units at $1.15 per unit 5a. Sold 15,000 units at $3.50 on Account 5b. COGS for Sales on Account 6. Collect $70,000 on Account 7. Paid $117,250 of Accounts Payable 8. Purchased Inventory on Account - 170,000 Units at $1.50 per unit 9a. Sold 175,000 units at $3.50 on Account 9b. COGS for Sales on Account 10. Collect $472,500 on Account 11. Paid $218,600 of Accounts Payable 12. Purchased Inventory on Account - 275,000 Units at $1.35 per unit 13a. Sold 200,000 units at $3.50 on Account 257,000.00 $ 17,500.00 $ 550,000 1,500,000 (300,000) 28,000.00 30 28,750 52,500 (29,150) 70,000 S (117,250) (70,000) 255,000 612,500 (254,100) (472,500) 472,500 $ (218,600) 371,250 700,000 13b. COGS Sales on Account (272,850) 14. Collect $735,000 on Account 15. Paid $494,150 of Accounts Payable 16. Purchased Inventory on Account - 300,000 Units at $1.15 per unit 17. Paid Sales & Marketing Expenses of $30,000 18. Paid Operating Expenses of $75.708 19. Record Wages Payable of $40,000 20. Paid Product Line Research & Development Expenses of $150,000 21. Paid Advertising Expenses of $87,500 735,000 S (494,150) (735,000) 345,000 (30,000) (75.708) (150,000) (87,500) 22. Made the yearly required payment on the note payable. The note carries a 7% nterest rate and requires payments of $50,000 plus interest each December 31. (88,500) 23. Record first year of Depreciation on Equipment Purchased in Year 2 with Salvage Value of $38,000 & useful life of 7 Yrs 24. Declared a $10,000 cash dividend for stockholders 25. Paid a $10.000 cash dividend for stockholders Balance at end of Yr 2 (10.000) 2,012,792 105.000 S 471,900 S 30
Beginning Balances as of Dec 31, Year 1 L.Acquired $550,000 by signing a note payable with a local bank 2. Sold 25,000 shares of $22 Common Stock for $1,500,000 3. Purchased Equipment for $300,000 4. Purchased Inventory on Account - 25,000 Units at $1.15 per unit 5a. Sold 15,000 units at $3.50 on Account 5b. COGS for Sales on Account 6. Collect $70,000 on Account 7. Paid $117,250 of Accounts Payable 8. Purchased Inventory on Account - 170,000 Units at $1.50 per unit 9a. Sold 175,000 units at $3.50 on Account 9b. COGS for Sales on Account 10. Collect $472,500 on Account 11. Paid $218,600 of Accounts Payable 12. Purchased Inventory on Account - 275,000 Units at $1.35 per unit 13a. Sold 200,000 units at $3.50 on Account 257,000.00 $ 17,500.00 $ 550,000 1,500,000 (300,000) 28,000.00 30 28,750 52,500 (29,150) 70,000 S (117,250) (70,000) 255,000 612,500 (254,100) (472,500) 472,500 $ (218,600) 371,250 700,000 13b. COGS Sales on Account (272,850) 14. Collect $735,000 on Account 15. Paid $494,150 of Accounts Payable 16. Purchased Inventory on Account - 300,000 Units at $1.15 per unit 17. Paid Sales & Marketing Expenses of $30,000 18. Paid Operating Expenses of $75.708 19. Record Wages Payable of $40,000 20. Paid Product Line Research & Development Expenses of $150,000 21. Paid Advertising Expenses of $87,500 735,000 S (494,150) (735,000) 345,000 (30,000) (75.708) (150,000) (87,500) 22. Made the yearly required payment on the note payable. The note carries a 7% nterest rate and requires payments of $50,000 plus interest each December 31. (88,500) 23. Record first year of Depreciation on Equipment Purchased in Year 2 with Salvage Value of $38,000 & useful life of 7 Yrs 24. Declared a $10,000 cash dividend for stockholders 25. Paid a $10.000 cash dividend for stockholders Balance at end of Yr 2 (10.000) 2,012,792 105.000 S 471,900 S 30
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter7: Receivables And Investments
Section: Chapter Questions
Problem 7.11E
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