Phantom Incorporated, reported the following account balances on January 1. Debit Credit Accounts Receivable $ 5,000 Accumulated
Question:
Phantom Incorporated, reported the following account balances on January 1.
Debit | Credit | |
---|---|---|
Accounts Receivable | $ 5,000 | |
Accumulated Depreciation | $ 30,000 | |
Additional Paid-in Capital | 110,000 | |
Allowance for Doubtful Accounts | 2,000 | |
Bonds Payable | 0 | |
Buildings | 267,000 | |
Cash | 15,000 | |
Common Stock, 10,000 shares of $1 par | 10,000 | |
Notes Payable (long-term) | 15,000 | |
Retained Earnings | 120,000 | |
Treasury Stock | 0 | |
TOTALS | $ 287,000 | $ 287,000 |
The company entered into the following transactions during the year.
January 15 | Issued 15,000 shares of $1 par common stock for $70,000 cash. |
---|---|
January 31 | Collected $3,000 from customers on account. |
February 15 | Reacquired 3,200 shares of $1 par common stock into treasury for $35,200 cash. |
March 15 | Reissued 2,200 shares of treasury stock for $26,200 cash. |
August 15 | Reissued 600 shares of treasury stock for $4,600 cash. |
September 15 | Declared (but did not yet pay) a $1 cash dividend on each outstanding share of common stock. |
October 1 | Issued 100, 10-year, $1,110 bonds, at a quoted bond price of 101. |
October 3 | Wrote off a $1,500 balance due from a customer who went bankrupt. |
December 29 | Recorded $250,000 of service revenue, all of which was collected in cash. |
December 30 | Paid $220,000 cash for this year’s wages through December 31. (Ignore payroll taxes and payroll deductions.) |
December 31 | Calculated $10,000 of depreciation for the year to be recorded. (Ignore accrual adjustments for interest and income taxes. |
General Journal tab - Prepare the journal entries to record each transaction. Review the accounts as shown in the General Ledger and Trial Balance tabs.
Balance Sheet tab - Prepare the noncurrent liabilities and stockholders’ equity sections of the balance sheet at December 31. At the end of the year, the adjusted net income was $20,000.
General Journal tab - Prepare a closing journal entry for the income statement accounts, assuming the events on December 29–31 were the only transactions to affect income statement accounts.
General Journal tab - After preparing the financial statements, record the closing entry for Dividends.
Impact on Debt to Assets Ratio tab - Calculate the Debt to Assets Ratio and analyze the impact of the Debt to Assets Ratio.
Fundamentals of Financial Accounting
ISBN: 978-1259864230
6th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby