Tabares Corporation had these transactions during 2017.
(a) Issued $50,000 par value common stock for cash.
(b) Purchased a machine for $30,000, giving a long-term note in exchange.
(c) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000.
(d) Declared and paid a cash dividend of $18,000.
(e) Sold a long-term investment with a cost of $15,000 for $15,000 cash.
(f) Collected $16,000 of accounts receivable.
(g) Paid $18,000 on accounts payable.
Instructions
Analyze the transactions and indicate whether each transaction resulted in a
Want to see the full answer?
Check out a sample textbook solutionChapter 13 Solutions
Managerial Accounting: Tools for Business Decision Making
- Dunn Company recognized a 5,000 unrealized holding gain on investment in Starbuckss long-term bonds during 2019. The company classified its investment as an available-for-sale security. How would this information be reported on a statement of cash flows prepared using the indirect method?arrow_forwardDuring the fourthquarter of 2018, Rainbarrel, Inc. generated excess cash, which the company invested in equitysecurities as follows:Nov 16 Purchased 1,200 common shares as an investment in equity securities,paying $6 per share. Rainbarrel owns less than 10% of the outstandingstock in the companies in which it invests.Dec 16 Received cash dividend of $0.35 per share on the equity securities.Dec 31 Adjusted the equity securities to fair value of $4 per share.2018Requirements1. Open T-accounts for Cash (including its beginning balance of $23,000), Investment inEquity Securities, Dividend Revenue, and Unrealized Gain (Loss) on Equity Securities.2. Journalize the foregoing transactions and post to the T-accounts.3. Show how to report the short-term investment on Rainbarrel’s balance sheet atDecember 31, 2018.4. Show how to report whatever should appear on Rainbarrel’s income statement for the yearended December 31, 2018.5. Rainbarrel sold the equity securities for $6,000 on January 14,…arrow_forwardDuring 2017, Latvia Company purchased trading securities with the following cost and market value on December 31, 2017. Security Cost Market Value A – 1 000 shares 200 000 300 000 B – 10 000 shares 1 700 000 1 600 000 C – 20 000 shares 3 100 000 2 900 000 5 000 000 4 800 000 The entity sold 10 000 shares of security B on January 15, 2018, for P 150 per share. 1. What amount of unrealized gain or loss should be reported in income statement for 2017? 2. What amount should be reported as loss on sale of trading investment of 2018?arrow_forward
- Lexington Co. has the following securities outstanding on December 31, 2017 (its first year of operations). Cost Fair Value Greenspan Corp. stock $20,000 $19,000 Summerset Company stock 9,500 8,800 Tinkers Company stock 20,000 20,600 $49,500 $48,400 During 2018, Summerset Company stock was sold for $9,200, the difference between the $9,200 and the “fair value” of $8,800 being recorded as a “Gain on Sale of Investments.” The market price of the stock on December 31, 2018, was Greenspan Corp. stock $19,900; Tinkers Company stock $20,500.Instructions(a) What justification is there for valuing equity securities at fair value and reporting the unrealized gain or loss as part of net income?(b) How should Lexington Co. report this information in its financial statements at December 31, 2017? Explain.(c) Did Lexington Co. properly account for the sale of the Summerset Company stock? Explain.(d) Are there any additional entries necessary for Lexington Co. at December 31,…arrow_forwardIn 2012, ABC Corporation purchased treasury stock with a cost of $25,000. During the year, the company paid dividends of $15,000 and issued bonds payable for $750,000. Cash flows from financing activities for 2012 are _____.arrow_forwardIn 2023, Chen Corporation purchased treasury stock with a cost of $54,000. During the year, the company declared and paid dividends of $12,000 and issued bonds payable for $900,000. Net cash provided by financing activities for 2023 is: A. $834,000. B. $900,000. C. $846,000. D. $888,000.arrow_forward
- Envoi was formed on January 1 , 2016 , when Envoi issued common shares for $ 500,000 . Early in January 2016 , Envoi made the following cash payments : a 250,000 for equipment b . 200,000 for inventory ( four cars at $ 50,000 each ) c 10,000 for 2016 rent on a store building In February 2016 , Envoi purchased six cars for inventory on account . Cost of this inventory was $ 260,000 ( $ . Before year - end , Envoi paid $ 208,000 of this debt . Envoi uses the FIFO method to account for inventory . During 2016 , Envoi sold eight vintage autos for a total of $ 600,000 . Before year - end , Envoi collected 80 % of this amount . The business employs three people . The combined annual payroll is of which Envoi owes $ 4,000 at year end . At the end of the year , Envoi paid income tax of $ 10,000 . Late in 2016 , Envoi declared and paid cash dividends of $ 11,000 . For equipment , Envoi uses the straight - line depreciation method over five years with zero residual value . Requirements 1.…arrow_forwardSplish Brothers Inc. purchased treasury stock with a cost of $74800 during 2022. During the year, the company paid dividends of $27200 and issued bonds payable for proceeds of $1191400. Cash flows from financing activities for 2022 total?arrow_forwardIn 2023, Chen Corporation purchased treasury stock with a cost of $47,000. During the year, the company declared and paid dividends of $14,000 and issued bonds payable for $1,100,000. Net cash provided by financing activities for 2023 is: A $1,086,000.B. $1,053,000.C. $1,039.000.D. $1,100,000.arrow_forward
- The 2017 balance sheet of Kerber's Tennis Shop , Incorporated, showed $2.4 million long-term debt, $760,000 in the common stock account, and $5.95 million in the additional paid-in surplus account. The 2018 balance sheet showed $3.95 million $985,000, and $8.05 million in the same three accounts , respectively . The 2018 income statement showed an interest expense of $ 310,000 . The company paid out $590,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $690,000 , and the firm reduced its net working capital Investment by $185,000 , what was the firm's 2018 operating cash flow , or OCF ? Typed solutionarrow_forwardAssume that the following transactions (in millions) occurred during the next fiscal year (ending on September 29, 2018): Borrowed $21,304 from banks due in two years. Purchased additional investments for $21,500 cash; one-fifth were long term and the rest were short term. Purchased property, plant, and equipment; paid $9,610 in cash and signed a short-term note for $1,448. Issued additional shares of common stock for $1,507 in cash; total par value was $1 and the rest was in excess of par value. Sold short-term investments costing $19,045 for $19,045 cash. Declared $11,163 in dividends to be paid at the beginning of the next fiscal year. Use the drop-downs below to select the accounts that should be properly included on the balance sheet. MANGO, INC. Balance Sheet At September 29, 2018 (in millions) Assets Current assets: Total current assets 0 Total assets $0 Liabilities…arrow_forwardAssume that the following transactions (in millions) occurred during the next fiscal year (ending on September 29, 2018): Borrowed $21,304 from banks due in two years. Purchased additional investments for $21,500 cash; one-fifth were long term and the rest were short term. Purchased property, plant, and equipment; paid $9,610 in cash and signed a short-term note for $1,448. Issued additional shares of common stock for $1,507 in cash; total par value was $1 and the rest was in excess of par value. Sold short-term investments costing $19,045 for $19,045 cash. Declared $11,163 in dividends to be paid at the beginning of the next fiscal year. QUESTION: Compute Mango's current ratio for the year ending on September 29, 2018. (Round your answer to 2 decimal places.) Current Ratio:arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningFinancial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning