Required information [The following information applies to the questions displayed below.] The comparative balance sheets for...
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Required information [The following information applies to the questions displayed below.] The comparative balance sheets for 2024 and 2023 and the income statement for 2024 are given below for Arduous Company. Additional information from Arduous's accounting records is provided also. ARDUOUS COMPANY Comparative Balance Sheets December 31, 2024 and 2023 ($ in millions) Assets Cash Accounts receivable. Investment revenue receivable Inventory Prepaid insurance Long-term investment Land Buildings and equipment Less: Accumulated depreciation Patent Liabilities Accounts payable 2024 2023 $ 137 $ 83 192 196 8 6 207 202 6 10 156 125 198 152 424 402 (99) (122) 33 35 $ 1,262 $ 1,089 Salaries payable Interest payable (bonds). Income tax payable Deferred tax liability Notes payable Lease liability Bonds payable Less: Discount on bonds Shareholders' Equity Common stock Paid-in capital-excess of par Preferred stock Retained earnings Less: Treasury stock $ 52 $ 69 8 13 10 6 14 16 13 10 23 0 85 0 217 277 (23) (26) 430 410 103 91 77 0 262 223 (9) 0 $ 1,262 $1,089 ARDUOUS COMPANY Income Statement For Year Ended December 31, 2024 ($ in millions) Revenues and gain: Sales revenue Investment revenue Gain on sale of treasury bills Expenses and loss: Cost of goods sold Salaries expense Depreciation expense Insurance expense Amortization expense Interest expense Loss on sale of equipment Income tax expense Net income. $ 450 17 2 $ 469 182 75 12 2 9 30 18 38 366 $ 103 Additional information from the accounting records: a. Investment revenue includes Arduous Company's $6 million share of the net income of Demur Company, an equity method investee. b. Treasury bills were sold during 2024 at a gain of $2 million. Arduous Company classifies its investments in Treasury bills as cash equivalents. c. Equipment originally costing $70 million that was one-half depreciated was rendered unusable by a flood. Most major components of the equipment were unharmed and were sold for $17 million d. Temporary differences between pretax accounting income and taxable income caused the deferred tax liability to increase by $3 million. e. The preferred stock of Tory Corporation was purchased for $25 million as a long-term investment. f. Land costing $46 million was acquired by issuing $23 million cash and a 15%, four-year, $23 million note payable to the seller. g. The right to use a building was acquired with a 15-year lease agreement; present value of lease payments, $92 million. Annual lease payments of $7 million are paid at the beginning of each year starting January 1, 2024. h. $60 million of bonds were retired at maturity. i. In February, Arduous issued a stock dividend (4 million shares). The market price of the $5 par value common stock was $8 per share at that time. J. In April, 1 million shares of common stock were repurchased as treasury stock at a cost of $9 million. Required: 1. Prepare the T-accounts for Arduous Company. Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.) Beginning Balance Operating Activities: Investing Activities: Financing Activities: Ending Balance Cash Beginning Balance Ending Balance. Accounts Receivable Debit Credit Beginm Ending Prepaid Insurance Debit Credit Beginning Balance Beginn Ending Balance Ending Long-term Investments Debit Credit Beginning Balance Beginni Ending Balance Ending I Buildings and Equipment Debit Credit Beginning Balance Beginnim Required information Patent Debit Credit Beginning Balance Beginn Ending Balance Ending Salaries Payable Debit Credit Beginning Balance Begini Ending Balance Income Tax Payable Debit Credit Beginning Balance Ending Balance Ending Begins Endin Notes Payable Debit Credit Beginning Balance Begin Ending Balance Endin Bonds Payable Debit Credit Beginning Balance B Ending Balance E Common Stock Debit Credit Beginning Balance B Ending Balance Preferred Stock Debit Credit Beginning Balance Ending Balance Er Be + En Treasury Stock Debit Credit Beginning Balance Be Ending Balance En Required information Investment Revenue Debit Credit Beginning Balance Ending Balance Cost of Goods Sold Debit Credit Beginning Balance Ending Balance Depreciation Expense Debit Credit Beginning Balance Ending Balance Insurance Expense Debit Credit Beginning Balance Ending Balance + Required information Ending Balance Insurance Expense Debit Credit Beginning Balance Ending Balance Income Tax Expense. Debit Credit Beginning Balance B Ending Balance Net Income (Income Summary) Debit Credit Beginning Balance Ending Balance E Beginning Balance Ending Balance Inventory Debit Credit Debit Beginning Balance Ending Balance Investment Revenue Receivable Land Debit Beginning Balance Ending Balance + Credit Credit Accumulated Depreciation Debit Credit Beginning Balance Ending Balance Accounts Payable Debit Credit Beginning Balance Ending Balance Interest Payable Debit Credit Beginning Balance Ending Balance Deferred Tax Liability Debit Credit Beginning Balance Ending Balance Lease Liability Debit Credit Beginning Balance Ending Balance Discount on Bonds Debit Credit Beginning Balance Ending Balance Paid-in Capital Debit Credit Beginning Balance Ending Balance Beginning Balance Ending Balance Beginning Balance Ending Balance Debit Retained Earnings Credit Sales Debit Credit Gain on Sale of Treasury Bills Debit Credit Beginning Balance Ending Balance Salaries Expense Debit Credit Beginning Balance Ending Balance Amortization Expense Debit Credit Beginning Balance Ending Balance Interest Expense Debit Credit Beginning Balance Ending Balance Ending Balance Interest Expense Debit Credit Beginning Balance Ending Balance Loss on Sale of Equipment Debit Credit Beginning Balance Ending Balance Required information [The following information applies to the questions displayed below.] The comparative balance sheets for 2024 and 2023 and the income statement for 2024 are given below for Arduous Company. Additional information from Arduous's accounting records is provided also. ARDUOUS COMPANY Comparative Balance Sheets December 31, 2024 and 2023 ($ in millions) Assets Cash Accounts receivable. Investment revenue receivable Inventory Prepaid insurance Long-term investment Land Buildings and equipment Less: Accumulated depreciation Patent Liabilities Accounts payable 2024 2023 $ 137 $ 83 192 196 8 6 207 202 6 10 156 125 198 152 424 402 (99) (122) 33 35 $ 1,262 $ 1,089 Salaries payable Interest payable (bonds). Income tax payable Deferred tax liability Notes payable Lease liability Bonds payable Less: Discount on bonds Shareholders' Equity Common stock Paid-in capital-excess of par Preferred stock Retained earnings Less: Treasury stock $ 52 $ 69 8 13 10 6 14 16 13 10 23 0 85 0 217 277 (23) (26) 430 410 103 91 77 0 262 223 (9) 0 $ 1,262 $1,089 ARDUOUS COMPANY Income Statement For Year Ended December 31, 2024 ($ in millions) Revenues and gain: Sales revenue Investment revenue Gain on sale of treasury bills Expenses and loss: Cost of goods sold Salaries expense Depreciation expense Insurance expense Amortization expense Interest expense Loss on sale of equipment Income tax expense Net income. $ 450 17 2 $ 469 182 75 12 2 9 30 18 38 366 $ 103 Additional information from the accounting records: a. Investment revenue includes Arduous Company's $6 million share of the net income of Demur Company, an equity method investee. b. Treasury bills were sold during 2024 at a gain of $2 million. Arduous Company classifies its investments in Treasury bills as cash equivalents. c. Equipment originally costing $70 million that was one-half depreciated was rendered unusable by a flood. Most major components of the equipment were unharmed and were sold for $17 million d. Temporary differences between pretax accounting income and taxable income caused the deferred tax liability to increase by $3 million. e. The preferred stock of Tory Corporation was purchased for $25 million as a long-term investment. f. Land costing $46 million was acquired by issuing $23 million cash and a 15%, four-year, $23 million note payable to the seller. g. The right to use a building was acquired with a 15-year lease agreement; present value of lease payments, $92 million. Annual lease payments of $7 million are paid at the beginning of each year starting January 1, 2024. h. $60 million of bonds were retired at maturity. i. In February, Arduous issued a stock dividend (4 million shares). The market price of the $5 par value common stock was $8 per share at that time. J. In April, 1 million shares of common stock were repurchased as treasury stock at a cost of $9 million. Required: 1. Prepare the T-accounts for Arduous Company. Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.) Beginning Balance Operating Activities: Investing Activities: Financing Activities: Ending Balance Cash Beginning Balance Ending Balance. Accounts Receivable Debit Credit Beginm Ending Prepaid Insurance Debit Credit Beginning Balance Beginn Ending Balance Ending Long-term Investments Debit Credit Beginning Balance Beginni Ending Balance Ending I Buildings and Equipment Debit Credit Beginning Balance Beginnim Required information Patent Debit Credit Beginning Balance Beginn Ending Balance Ending Salaries Payable Debit Credit Beginning Balance Begini Ending Balance Income Tax Payable Debit Credit Beginning Balance Ending Balance Ending Begins Endin Notes Payable Debit Credit Beginning Balance Begin Ending Balance Endin Bonds Payable Debit Credit Beginning Balance B Ending Balance E Common Stock Debit Credit Beginning Balance B Ending Balance Preferred Stock Debit Credit Beginning Balance Ending Balance Er Be + En Treasury Stock Debit Credit Beginning Balance Be Ending Balance En Required information Investment Revenue Debit Credit Beginning Balance Ending Balance Cost of Goods Sold Debit Credit Beginning Balance Ending Balance Depreciation Expense Debit Credit Beginning Balance Ending Balance Insurance Expense Debit Credit Beginning Balance Ending Balance + Required information Ending Balance Insurance Expense Debit Credit Beginning Balance Ending Balance Income Tax Expense. Debit Credit Beginning Balance B Ending Balance Net Income (Income Summary) Debit Credit Beginning Balance Ending Balance E Beginning Balance Ending Balance Inventory Debit Credit Debit Beginning Balance Ending Balance Investment Revenue Receivable Land Debit Beginning Balance Ending Balance + Credit Credit Accumulated Depreciation Debit Credit Beginning Balance Ending Balance Accounts Payable Debit Credit Beginning Balance Ending Balance Interest Payable Debit Credit Beginning Balance Ending Balance Deferred Tax Liability Debit Credit Beginning Balance Ending Balance Lease Liability Debit Credit Beginning Balance Ending Balance Discount on Bonds Debit Credit Beginning Balance Ending Balance Paid-in Capital Debit Credit Beginning Balance Ending Balance Beginning Balance Ending Balance Beginning Balance Ending Balance Debit Retained Earnings Credit Sales Debit Credit Gain on Sale of Treasury Bills Debit Credit Beginning Balance Ending Balance Salaries Expense Debit Credit Beginning Balance Ending Balance Amortization Expense Debit Credit Beginning Balance Ending Balance Interest Expense Debit Credit Beginning Balance Ending Balance Ending Balance Interest Expense Debit Credit Beginning Balance Ending Balance Loss on Sale of Equipment Debit Credit Beginning Balance Ending Balance
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