Financial Statement Homework #3 Name___________________ Please circle section time: 8:00, 9:30, 2:00
YOU MUST STAPLE YOUR PAGES TOGETHER!
Part 1: At November 30, 2016, Rocky Mountain Company had the following trial balance. There is detailed
information on the next page about December 2016 transactions that need to be recorded.
Rocky Mountain Company
Trial Balance
11/30/16
Cash
Accounts Receivable
Allowance for Doubtful Accounts
Short Term Note Receivable
Supplies
Inventory
Equipment
Building
Accumulated Depreciation
Copyright
Accounts Payable
Dividends Payable
Interest Payable
Unearned Revenue
ST Note Payable
LT Mortgage Payable
Bonds Payable
Premium on Bonds Payable
Common Stock - $1 par
Paid In Capital In Excess of Par – CS
Preferred Stock - $5 par
Paid In Capital In Excess of Par – PS
Treasury Stock
Retained Earnings
Dividends
Sales Revenue
Sales Returns & Allowances
Sales Discounts
Cost of Goods Sold
Bad Debts Expense
Depreciation Expense
Wages Expense
Rent Expense
Insurance Expense
Supplies Expense
Interest Revenue
Interest Expense
Gain on Sale of Equipment
Income Tax Expense
Total Dr
266,000
62,000 Cr 5,000
24,000
6,000
65,000
195,000
0
75,000
44,000
45,000
0
0
25,000
15,000
0
200,000
26,840
3,000
86,000
1,000
50,000
0
105,000
5,000
819,000
3,840
9,000
380,000
5,000
50,000
260,000
63,000
16,000
6,000
1,000
8,000
15,000
4,000
1,471,840 1,471,840
Page 1 of 9 Instructions: You must turn in the work performed on the sheets printed with this page. This WILL NOT BE
ACCEPTED ON PLAIN PAPER. Write the journal entries (on the following General Journal page) required for each of the events
described below. Write the entries in the order described below (#1 - #8).
Use ONLY the accounts listed on the trial balance for your journal entries.
Post the transactions to individual T-accounts and prepare an adjusted trial balance for Rocky Mountain
Company as of December 31, 2016. 1. The company purchased a building December 1, 2016 with a LT Mortgage Payable of $300,000 at 8%
interest. (Record the purchase of the building.)
2. The company issued 1,000 shares of Common Stock for $6,000 on December 25, 2016.
3. On December 29, 2016 the company declared a cash dividend of $3.00 per share for common stock on the
shares issued and declared (including the additional 1,000 shares declared on December 25th.)
4. The terms of the LT mortgage payable from #1 above require the company to make monthly installment
payments over the term of the loan. Each payment consists of interest on the unpaid balance of the loan
and a reduction of loan principal. Record the first monthly payment of $3,800 on the LT Mortgage Payable
on December 31, 2016.
5. The company last paid interest on the ST note payable on November 1, 2016. Record the accrued
interest expense for the last 2 months of 2016. The annual interest rate is 8%. Round to nearest
whole dollar.
6. The Bonds Payable and related Premium amounts on the Nov. trial balance relate to the Jan. 1, 2016
issuance of the following bonds: On Jan. 1, 2016, the company issued 10%, 10-year bonds when the
market rate for similar investments was 8%. The company pays interest each year on January 1st. On
Dec. 31, 2016, use the effective interest method of amortizing the premium on bonds payable to accrue
the interest expense for 2016. Round your interest expense calculation to the nearest whole
dollar. 7. The Unearned Revenue amount on the Nov. trial balance relates to amounts that the company previously
collected in cash for sales that were to be completed in the future. The company completed some of these
sales during December and now owes only $16,000 of that unearned revenue. Record the necessary
adjustment for December 31, 2016.
8. On December 31, 2016, the company purchased 50 shares of its own Preferred Stock for Treasury Stock
for $11 per share. Page 2 of 9 GENERAL JOURNAL
DATE ACCOUNT NAME DEBIT CREDIT Page 3 of 9 Use the space below for T-accounts (REQUIRED).
(Specific instructions: Prepare T-accounts for each account affected by a journal entry. Write in the
unadjusted balance for each of these accounts (from page 1)…the unadjusted balance might be a
debit, a credit, or zero balance. Now you are ready to post your journal entries from page 3 onto the
corresponding T-accounts and then calculate adjusted balances.) Page 4 of 9 Rocky Mountain Company
ADJUSTED TRIAL BALANCE
12/31/16
Dr Cr Cash
Accounts Receivable
Allowance for Doubtful Accounts
Short Term Note Receivable
Supplies
Inventory
Equipment
Building
Accumulated Depreciation
Copyright
Accounts Payable
Dividends Payable
Interest Payable
Unearned Revenue
ST Note Payable
LT Mortgage Payable
Bonds Payable
Premium on Bonds Payable
Common Stock - $1 par
Paid In Capital In Excess of Par – CS
Preferred Stock - $5 par
Paid In Capital In Excess of Par – PS
Treasury Stock
Retained Earnings
Dividends
Sales Revenue
Sales Returns & Allowances
Sales Discounts
Cost of Goods Sold
Bad Debts Expense
Depreciation Expense
Wages Expense
Rent Expense
Insurance Expense
Supplies Expense
Interest Revenue
Interest Expense
Gain on Sale of Equipment
Income Tax Expense
Total Page 5 of 9 1. What is the effect on the accounting equation when Treasury Stock is purchased?
Assets = Liabilities + Stockholders’ Equity
_____ = _______ + _________________ (fill in blanks with arrows to indicate what changes
and in which direction)
2. How many Common Stock shares are outstanding at 12/31/2016? (HINT: Remember that
the treasury shares purchased on 12/31/2016 were Preferred Shares, not Common Shares) 3. If this company had a common stock 3-1 stock split on Dec. 31, 2016:
a. How many shares would there be after the split?
b. What is the par value per share in dollars after the split?
4. Does the Carrying Value of the Bonds Payable and Premium increase or decrease over the
life of the bonds? 5. What will be the balance in the Mortgage Payable Account at Jan. 31, 2017 after the second
monthly payment is made? 6. The Company is about to issue $2,000,000 of 5-year, 12% bonds. Interest will be paid semiannually. The market interest rate for such securities is 10%. How much can The Company
expect to receive from the sale (issuance) of these bonds? Page 6 of 9 Part 2: NOTE: This is a DIFFERENT COMPANY. Using the trial balance below, complete
the Multi-Step Income Statement and prepare the Statement of Retained Earnings and
Classified Balance Sheet on the pages which follow. To get full credit you must include all
critical subtotals. Cash
Accounts Receivable
Allowance for Doubtful Accounts
Short term Note Receivable
Interest Receivable
Supplies
Inventory
Prepaid Expenses
Equipment
Accumulated Depreciation
Copyrights
Accounts Payable
Interest Payable
Unearned Revenue
Long Term Note Payable
Common Stock
Paid-in-Capital In Excess of Par - CS
Retained Earnings (1/1/15)
Dividends
Sales
Sales Returns & Allowances
Sales Discounts
Cost of Goods Sold
Bad debt expense
Depreciation Expense
Amortization Expense
Wages Expense
Rent Expense
Office Expense
Supplies Expense
Selling Expense
Interest Expense
Interest Revenue
Income Tax Expense
Totals Cajias Company
Adjusted Trial Balance
December 31, 2015
DEBIT
1,900
2,460 CREDIT 670
200
20
30
3,000
150
10,720
1,970
600
670
20
50
1,400
6,600
800
3,160
600
36,800
40
60
21,200
30
770
70
8,000
500
80
100
800
200
150
760
52,290 52,290
Page 7 of 9 Cajias Company
Multi Step Income Statement
For the year ended December 31, 2015
(Be sure to include all the necessary headings, totals and subtotals as outlined in Chapter 5. You
may not need to use all the lines provided. Note: The two columns below do not represent debit and
credit balances like they do on a trial balance. On the Income Statement, use the right column for
subtotals and totals.) Cajias Company
Statement of Retained Earnings
For the year ended December 31, 2015 Page 8 of 9 Cajias Company
Classified Balance Sheet
December 31, 2015
(Be sure to include all the necessary subtotals and totals as outlined in Chapter 2. You may not need
to use all of the lines provided. Note: The two columns below do not represent debit and credit
balances like they do on a trial balance. On the Balance Sheet, use the right column for subtotals
and totals.) Page 9 of 9

 

• 1492738996-Financial Statement Homework 3 S17 1.pdf

SuperTutor

(15)

Status NEW Posted 21 Apr 2017 01:04 AM My Price 20.00

-----------

Attachments

file 1492739005-Solutions file.docx preview (56 words )

S-----------olu-----------tio-----------ns -----------fil-----------e -----------Hel-----------lo -----------Sir-----------/Ma-----------dam----------- T-----------han-----------k y-----------ou -----------for----------- yo-----------ur -----------int-----------ere-----------st -----------and----------- bu-----------yin-----------g m-----------y p-----------ost-----------ed -----------sol-----------uti-----------on.----------- Pl-----------eas-----------e p-----------ing----------- me----------- on----------- ch-----------at -----------I a-----------m o-----------nli-----------ne -----------or -----------inb-----------ox -----------me -----------a m-----------ess-----------age----------- I -----------wil-----------l b-----------e q-----------uic-----------kly----------- on-----------lin-----------e a-----------nd -----------giv-----------e y-----------ou -----------exa-----------ct -----------fil-----------e a-----------nd -----------the----------- sa-----------me -----------fil-----------e i-----------s a-----------lso----------- se-----------nt -----------to -----------you-----------r e-----------mai-----------l t-----------hat----------- is----------- re-----------gis-----------ter-----------ed -----------onÂ----------- th-----------is -----------web-----------sit-----------e. ----------- H-----------YPE-----------RLI-----------NK -----------&qu-----------ot;-----------htt-----------p:/-----------/wo-----------rkb-----------ank-----------247-----------.co-----------m/&-----------quo-----------t; -----------\t -----------&qu-----------ot;-----------_bl-----------ank-----------&qu-----------ot;----------- -----------Tha-----------nk -----------you----------- -----------

Not Rated(0)

• Buy Answer