ACC 290 chapter 3 Appendix A E3-4 E3-9 P3-5A P3-6A

ACC 290 chapter 3 Appendix A E3-4 E3-9 P3-5A P3-6A

E3-4 A tabular analysis of the transactions made during August 2012 by Nigel Company during its first month of operations is shown below. Each increase and decrease instockholders’ equity is explained.

Assets _ Liabilities _ Stockholders’ Equity

Accounts Common Retained Earnings

Cash+ A/R + Supp+Equip-Payable+Stock+Rev.-Exp.-Div.

1. +$20,000 _$20,000 Com. Stock

2. -1,000 _$5,000 _$4,000

3. -750 _$750

4. +4,100         _$5,400 _$9,500 Serv. Rev.

5. -1,500 _1,500

6. -2,000 _$2,000 Div.

7. -800 _$ 800 Rent Exp.

8. +450 _450

9. -3,000 _3,000 Sal. Exp.

10. +300 _300 Util. Exp

Instructions

(a) Describe each transaction.

(b) Determine how much stockholders’ equity increased for the month.

(c) Compute the net income for the month.

E3-9 The May transactions of StepAside Corporation were as follows.

May     4          Paid $700 due for supplies previously purchased on account.

7          Performed advisory services on account for $6,800.

8          Purchased supplies for $850 on account.

9          Purchased equipment for $1,000 in cash.

17        Paid employees $530 in cash.

22        Received bill for equipment repairs of $900.

29        Paid $1,200 for 12 months of insurance policy. Coverage begins June 1.

Instructions

Journalize the transactions. Do not provide explanations.

P3-5A Towne Architects incorporated as licensed architects on April 1, 2012. During the first month of the operation of the business, these events and transactions occurred:

Apr.     1          Stockholders invested $18,000 cash in exchange for common stock of the corporation.

1          Hired a secretary-receptionist at a salary of $375 per week, payable monthly.

2          Paid office rent for the month $900.

3          Purchased architectural supplies on account from Spring Green Company $1,300.

10        Completed blueprints on a carport and billed client $1,900 for services.

11        Received $700 cash advance from J. Madison to design a new home.

20        Received $2,800 cash for services completed and delivered to M. Svetlana.

30        Paid secretary-receptionist for the month $1,500.

30        Paid $300 to Spring Green Company for accounts payable due.

The company uses these accounts: Cash, Accounts Receivable, Supplies, Accounts Payable, Unearned Service Revenue, Common Stock, Service Revenue, Salaries and Wages Expense, and Rent Expense.

Instructions

(a) Journalize the transactions, including explanations.

(b) Post to the ledger T accounts.

(c) Prepare a trial balance on April 30, 2012.

P3-6A This is the trial balance of Mimosa Company on September 30.

MIMOSA COMPANY

Trial Balance

September 30, 2012

	Debit	Credit
Cash	$ 8,200
Accounts Receivable	2,600
Supplies	2,100
Equipment	8,000
Accounts Payable		$ 4,800
Unearned Service Revenue		1,100
Common Stock		15,000
	$20,900	$20,900

The October transactions were as follows.

Oct.      5          Received $1,300 in cash from customers for accounts receivable due.

10        Billed customers for services performed $5,100.

15        Paid employee salaries $1,200.

17        Performed $600 of services for customers who paid in advance in August.

20        Paid $1,900 to creditors for accounts payable due.

29        Paid a $300 cash dividend.

31        Paid utilities $400.

Instructions

(a) Prepare a general ledger using T accounts. Enter the opening balances in the ledger accounts as of October 1. Provision should be made for these additional accounts: Dividends, Service Revenue, Salaries and Wages Expense, and Utilities Expense.

(b) Journalize the transactions, including explanations.

(c) Post to the ledger accounts.

(d) Prepare a trial balance on October 31, 2012.

Journalize transactions, post, and prepare a trial balance.

(SO 3, 5, 6, 7, 8), AP (c) Cash $18,800

Tot. trial balance $24,400 Journalize transactions, post, and prepare a trial balance. (SO 3, 5, 6, 7, 8), AP (d) Cash $ 5,700 Tot. trial balance $24,100

TUTORIAL PREVIEW[Excel Sheet]                 

A)
	GENERAL JOURNAL
DATE	ACCOUNT TITLE AND EXPLANATION					DEBIT	CREDIT
Apr. 1	Cash					18,000
	Common Stock						18,000
	(Issued shares of stock for cash)
1	No entry
2	Rent expense					900
	Cash						900

File name: ACC-290-Appendix-A.xls File type: XLS  Price: $30

A company has a capital structure as follows: Total Assets $600,000 Debt $300,000 Preferred Stock $100,000 Common Equity $200,000.

A company has a capital structure as follows: Total Assets $600,000 Debt $300,000 Preferred Stock $100,000 Common Equity $200,000.

What would be the minimum expected return from a new capital investment project to satisfy the suppliers of the capital? Assume the applicable tax rate is 40%, interest on debt is 11%, flotation cost per share of preferred stock is $0.75, and flotation cost per share of common stock is $4. The preferred and common stocks are selling in the market for $26 and $143 a share respectively, and they are expected to pay a dividend of $2 and $7, respectively, in one year. The company's dividends are expected to grow at 13% per year. The firm would like to maintain the existing capital structure to finance the new project. Answer: The minimum expected return from a new capital investment project is the WACC plus any additional risk premium. Since no additional risk is mentioned, we will use the WACC.

TUTORIAL PREVIEW

Cost of debt = Interest rate x (1 - Tax rate)

Interest rate =	11%
Tax Rate =	40%
Cost of debt =	6.60%

 

File Name: A company has a.xls File type: XLS PRICE: $6

 

The corporate treasurer of Gator Electronics Corporation expects the company to grow at 4% in the future, and assumes debt securities at 6% interest (tax rate = 30%) to be a cheaper option to finance the growth.

The corporate treasurer of Gator Electronics Corporation expects the company to grow at 4% in the future, and assumes debt securities at 6% interest (tax rate = 30%) to be a cheaper option to finance the growth. The current market price per share of its common stock is $39, and the expected dividend in one year is $1.50 per share. Calculate the cost of the company's retained earnings and check if the treasurer's assumption is correct.

The risk-free rate on 10-year U.S. Treasury bills is 3% and the expected rate of return on the overall stock market is 11%. If Gator Electrics has a beta of 1.6. What is the cost of equity?

TUTORIAL PREVIEW

Cost of retained earnings = (D1/ P0) + g

D1 =	1.5
P0 =	39
g =	4%

File name: Gator-Electronics-2ques.xls File type: XLS Price: $6
 

The completed financial statement columns of the worksheet for Hubbs Company are shown below.

Problem 4-3A The completed financial statement columns of the worksheet for Hubbs Company are shown below.

Hubbs Company Worksheet

For the Year Ended December 31, 2014

Income Statement Balance Sheet

Account

No. Account Titles Dr. Cr. Dr. Cr. 101 Cash 6,200 112 Accounts Receivable 7,500 130 Prepaid Insurance 1,800 157 Equipment 33,000 167 Accumulated Depreciation—Equip. 9,900 201 Accounts Payable 11,700 212 Salaries and Wages Payable 3,000 311 Common Stock 20,000 320 Retained Earnings 9,700

332 Dividends 4,000 400 Service Revenue 47,000 622 Maintenance and Repairs Expense 4,100 711 Depreciation Expense 3,300 722 Insurance Expense 2,200 726 Salaries and Wages Expense 35,200 732 Utilities Expense 4,000 Totals 48,800 47,000 52,500 54,300 Net Loss 1,800 1,800 48,800 48,800 54,300 54,300

Instructions

(a) Prepare an income statement, a retained earnings statement, and a classified balance sheet. No additional common stock was issued during 2014.

(b) Prepare the closing entries.

(c) Post the closing entries and rule and balance the accounts. Use T accounts. Income Summary is account No. 350.

(d) Prepare a post-closing trial balance.

TUTORIAL PREVIEW

(a)
HUBBS COMPANY, INC.
Income Statement
For the Year Ended December 31, 2014
Revenues
Service revenue		$47,000
Expenses
Maintenance and Repair expense	4,100
Depreciation expense	3,300

 File name: P4-3A-Hubbs-company.xls File type: XLS  Price: $9

The completed financial statement columns of the worksheet for Woods Company, Inc.

The completed financial statement columns of the worksheet for Woods Company, Inc.
ACC 280 P4-3A Woods Company, Inc.
Principles of Accounting: Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2008). Financial Accounting (6th ed.). Hoboken, NJ: Wiley.
Axia College of University of Phoenix (UoP)
Problem 4-3A The completed financial statement columns of the worksheet for Woods Company, Inc. are shown below.
Problems: Set A 183
Adjusted Account Trial Balance
No. Account Titles Dr. Cr.
130 Prepaid Insurance 4,400
151 Office Equipment 44,000
152 Accumulated Depreciation—Office Equipment 20,000
200 Notes Payable 20,000
201 Accounts Payable 8,000
212 Salaries Payable 2,600
230 Interest Payable 1,000
311 Common Stock 30,000
320 Retained Earnings 6,000
332 Dividends 12,000
400 Service Revenue 77,800
610 Advertising Expense 12,000
631 Supplies Expense 3,700
711 Depreciation Expense 8,000
722 Insurance Expense 4,000
726 Salaries Expense 39,000
905 Interest Expense 1,000
Totals 165,400 165,400
WOODS COMPANY, INC.
Worksheet
For the Year Ended December 31, 2008
Account Income Statement Balance Sheet
No. Account Titles Dr. Cr. Dr. Cr.
101 Cash 8,200
112 Accounts Receivable 7,500
130 Prepaid Insurance 1,800
157 Equipment 28,000
167 Accumulated Depreciation 8,600
201 Accounts Payable 11,700
212 Salaries Payable 3,000
311 Common Stock 20,000
320 Retained Earnings 14,000
332 Dividends 7,200
400 Service Revenue 44,000
622 Repair Expense 5,400
711 Depreciation Expense 2,800
722 Insurance Expense 1,200
726 Salaries Expense 35,200
732 Utilities Expense 4,000
Totals 48,600 44,000 52,700 57,300
Net Loss 4,600 4,600 48,600 48,600 57,300 57,300
Instructions
(a) Prepare an income statement, a retained earnings statement, and a classified balance sheet. No additional common stock was issued during 2008.
(b) Prepare the closing entries.
(c) Post the closing entries and rule and balance the accounts. Use T accounts. Income Summary is account No. 350.
(d) Prepare a post-closing trial balance.

TUTORIAL PREVIEW

PART A

(a)
WOODS COMPANY, INC.
Income Statement
For the Year Ended December 31, 2008
Revenues
Service revenue		$44,000
Expenses
Salaries expense	$35,200
Repair expense	5,400

File name: P4-3A-woods-company.xls File type: XLS  Price: $9