MUHAMMAD FURQAN

BUS-18F-030
FINAL ASSIGNMENT OF FINANCIAL ACCOUNTING
SUBMITTED TO RESPECTED MISS QURATULAIN
NAZEER AHMED

Q#1
Ans#
a. $75,000 - $38,000 = $37,000 beginning of year liabilities

($75,000 + 18,000) - ($37,000 + 4,000) = $52,000 end of year owner’s equity

b. $44,000 + $66,000 = $110,000 beginning of year assets

($110,000 + 10,000) - ($44,000 - 5,000) = $81,000 end of year owner’s equity

Question II:

Ans#
Entry Entry
Account Name Increase Account Name Increase
Type(a) ofAccount Amount orDecrease Type(a) ofAccount Amount orDecrease
(b) (c) (d) (b) (c) (d)
1 Asset Cash $55000 Increase SE C stock $55000 Increase
2 Asset Cash $7000 Decrease L Act paybl $7000 Decrease
3 Asset Act rec $2565 Increase R Fee earnd $2565 Increase
4 Asset Cash $8450 Increase A Act recv $8450 Decrease
5 Asset Cash $2500 Decrease SE Dividend $2500 Increase
6 Liabilit Act $160 Increase E Utility $160 Increase

Q# III:

Ans#
A L SE
 (a) Received cash from sale of common stock ____+_ _____ ___+_
(b) Purchased supplies on account ___+__ ___+__ _
_____
(c) Paid rent for the current month __-___ _____ ___-__
(d) Received cash for services sold to customers __+___ _____ __+__
(e) Returned some defective supplies purchased in (b) ___-___ _-____ ______
(f) Paid insurance premiums in advance __+,-___ _____ _____
(g) Paid cash to creditor for purchases in (b) ___-__ __-___ _____
(h) Charged customers for services sold on account __+___ _____ __+__
(i) Paid cash to a customer as a refund for an ___-__ _____ _
___-__
(j) Received cash on account from customers __+,-___ _____ _____
(k) Payment of dividends __-___ _____ __-___
(l) Recorded the cost of supplies used during the year ___-__ _____ __-___
(m) Received invoice for electricity used _____ __+___ ___-__
(n) Paid wages ___-__ _____ ___-__
(o) Purchased a truck for cash ___+,-__ _____ _____

Q# IV:

Solution:

Webb Co.
Balance Sheet
December 31, 2014
Assets
Current assets:
Cash $96,000
Notes receivable 50,000
Accounts receivable $275,000
Less allowance for doubtful accounts 40,000 235,000
Interest receivable 1,000
Total current assets $382,000

Q#V
Solution:

a.Accounts receivable turnover = Sales/Average accounts receivable

Accounts receivable turnover = $34,124,961/[($749,321 +$719,365)/2]
Accounts receivable turnover = 46.47

b.Number of days’ sales in receivables = Accounts receivable, end of year/Avg. daily sales
Number of days’ sales in receivables
= [($749,321 + $719,365)/2]/ ($34,124,961/365 days)
Number of days’ sales in receivables = 7.85

Q# VI:

Solution:
1. (60,000 /12) =5,000 shares
2.( 900,000 /60,000) =$ 15
3.(600,000/5000)=$120
4.(1,500,000-60,000) =$1,440,000
5.(1,440,000+200,000)= $1,640,000
6.( 60,000+5000-5,000)=60,000
7. Beginning value of retained earnings= net income- dividend paid
= 75,000-20,000
=55,000
Earning per share= net income - preferred dividend/ avg outstanding numbers of share
=(75,000-20,000)/60000+5000/2
=55,000/32500
EPS= 16.92

Q#VII:

Solution:
Stockholder's equity
Paid in capital:
Common stock $75 par $4,725,000
(70,000 share authorizes
63000 share issued)
Paid in capital in excess of 679,000 5,404,000
par
Paid in capital from sale of 25,200
treasury stock
Total paid in capital 5429200
Retained earnings 2,032,800
Total 7,462,000
Deduct treasury stock 600,000
Total stockholders equity 6,862,000

Q# VIII:
A
Solution:
Earnings per share is calculated for Equity shares.

And the treasury stock is not included.

Total equity shares in number = 11,000 - 1,000 (Treasury stock)

= 10,000 shares

Total earnings = $200,000

Preference dividend = 5,000 \times× $50 \times× 6% = $15,000
earnings after preference dividend = 200,000 -200,000−15,000 = $285,000
Earnings per share =285,000/10,000=28.5

Q# IX:
On January 1, Year 1, a company had the following transactions:

- Issued 10,000 shares of $2.00 par common stock for

$12.00 per share.
- Issued 3,000 shares of $50 par, 6% cumulative preferred stock for $70 per share.
- Purchased 1,000 shares of previously issued common stock for $15.00 per share.

The company had the following dividend information available:

Year 1 - No dividend paid

Year 2 - Paid a 2,000 total dividend
Year 3 - Paid a20,000 total dividend
Year 4 - Paid a$25,000 total dividend

Using the following format, fill in the correct values for each year:

  Year 1 Year 2 Year 3 Year 4

Common stock dividend 11,000

Preferred stock dividend 2000 20,00 14000

0
Dividends in arrears 9000 1600p 5,000

Q#X:

Journalize the following selected transactions completed during the current

fiscal year:
 Mar.  4 The board of directors of New Town, Inc. declared a stock split that reduced
the par of common shares from $100 to $20. This action increased the number
of outstanding shares to 500,000.

Declared a dividend of $1.75 per share on the outstanding shares of common

        26
stock.

Apr.   5 Paid the dividend declared on March 26.

Nov.   1 Declared a 5% stock dividend on the common stock outstanding (the fair
market value of the stock to be issued is $25).

Dec.   1 Issued the certificates for the common stock dividend declared on November 1.
Solution:
Mar 26 : cash dividend 875,000
cash dividend payable 875,000

Apr 5 : cash dividend payable 875,000

Cash 875,000
Nov 1 : Stock Dividends 625,000
Stock Dividends Distributable 375,000
Paid-In Capital in Express of Par-Common Stock 250,000

Dec 1 : Stock Dividends Distributable. 625,000

Common stock 625,000