On January 1, 2018, the general ledger of Grand Finale

On January 1, 2018, the general ledger of Grand Finale Fireworks includes the following acccount balances:
On January 1, 2018, the general ledger of Grand Finale

During January 2018, the following transactions occur:
January 9 January 10 January 12 January 15 January 21 January 22 January 29
January 2 Issue an additional 2,000 shares of $1 par value common stock for $40,000. Provide services to customers on account, $14,300. Purchase additional supplies on account, $4,900. Repurchase 1,000 shares of treasury stock for $18 per share. Pay cash on accounts payable, $16,500. Provide services to customers for cash, $49,100. Receive cash on accounts receivable, $16,600.
Declare a cash dividend of $0.30 per share to all shares outstanding on January 29. The dividend is payable on February 15.
January 30 January 31
1. Record each of the transactions listed above.
2. Record adjusting entries on January 31.
a. Unpaid utilities for the month of January are $6,200.
b. Supplies at the end of January total $5,100.
c. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $10,000.
d. Accrued income taxes at the end of January are $2,000.
3. Prepare an adjusted trial balance as of January 31, 2018, after updating beginning balances (above) for transactions during January (Requirement 1) and adjusting entries at the end of January (Requirement 2).
4. Prepare a multiple-step income statement for the period ended January 31, 2018.
5. Prepare a classified balance sheet as of January 31, 2018.
6. Record closing entries.
7. Analyze the following for Grand Finale Fireworks:
a. Calculate the return on equity for the month of January. If the average return on equity for the industry for January is 2.5%, is the company more or less profitable than other companies in the same industry?
b. How many shares of common stock are outstanding as of January 31, 2018?
c. Calculate earnings per share for the month of January. (Hint: To calculate average shares of common stock outstanding take the beginning shares outstanding plus the ending shares outstanding and divide the total by 2.) If earnings per share was $3.60 last year (i.e., an average of $0.30 per month), is earnings per share for January 2018 better or worse than last year's average?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...


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