Accounting homework help

Instructions
 The title page is a requirement
 You are supposed to answer the questions on your own
 Submit only the solution to the question. Do not copy-paste the questions
in your submission
 Any reference to any kind of open sources will trigger the academic
consequences
 For all questions show all your calculation, starting with the formula,
then – calculation, then – solution
 In calculations the signs as $, %, etc. should accompany the figures, e.g.
$40, 15%, 3.5 times
 Neither, Excel skills, nor writing style will be awarded any marks
 Make sure that the tables fit into the pages
 Start answering each question from the new page. Only ONE ANSWER for
ONE PAGE
 Do NOT use multiple colour or highlighting
 No bonus marks for the early submission
 Design your submission using the APA or CHICAGO style
READ THE QUESTION CAREFULLY AND
ANSWER WHAT IS ASKED
Page 2 of 9
Question 1 {17 marks}
The following items are taken from the financial statements of Maroon Company for
2020:
Accounts payable $ 10,000
Accounts receivable 11,000
Accumulated depreciation—equipment 38,000
Advertising expense 21,000
Cash 14,000
Common stock 90,000
Depreciation expense 12,000
Dividends 15,000
Equipment 210,000
Insurance expense 3,000
Notes payable (due 2023) 70,000
Prepaid insurance 6,000
Rent expense 17,000
Retained earnings (beginning) 12,000
Salaries and wages expense 34,000
Salaries and wages payable 3,000
Service revenue 130,000
Supplies 4,000
Supplies expense 6,000
Required
a) Prepare in good form an Income statement
b) Prepare in good form a Statement of retained earnings
c) Prepare a Classified balance sheet for Maroon Company at December 31, 2020,
assuming the note payable is a long-term liability
d) Compute the current ratio, debt to assets ratio, and earnings per share value.
The average number of shares outstanding for 2020 was 10,000
Page 3 of 9
Question 2 {14 marks}
A tabular analysis of the transactions, made during March 2020 by a Company
during its first month of operation, is shown below:
Assets = Liability + Shareholders’ Equity
?
? ? ? ? ? ? ? ? ? ?
1. $30,000 $30,000
2. (1,000) $5,000 $4,000
3. (750) $750
4. 2,400 $5,900 8,300
5. (1,500) (1,500)
6. (1,000) (1,000)
7. (800) (800)
8. 450 (450)
9. (4,000) (4,000)
10. 500 (500)
Required
(a) In the columns of the table: name the accounts
(b) In a sentence: indicate each increase and decrease in accounts and explain
them
(c) Determine by how much shareholders’ equity increased or decreased for
the month
(d) Prepare in good form an Income statement for the month
Show all your computations
Page 4 of 9
Question 3 {12 marks}
The Circus Company’s bank statement for the month of April showed a balance per
bank of $7,000. The company’s Cash account in the accounting records had a
balance of $5,659 at April 30. Other information is as follows:
 Cash receipts for April 30 recorded on the company’s books were $6,000 but this
amount does not appear on the bank statement.
 The bank statement shows a debit memorandum for $40 for check printing charges.
 Check No. 119 payable to AirBorn Company was recorded in the cash payments
record and cleared the bank for $248. A review of the accounts payable record shows
a $36 balance in the account of AirBorn Company and that the payment to them
should have been for $284.
 The total amount of checks still outstanding at April 30 amounted to $5,800.
 Check No. 138 was correctly written and paid by the bank for $409. The recording
shown a decrease to Accounts Payable and a decrease to Cash in Bank for $490.
 The bank returned an NSF check from a customer for $560.
 The bank included a credit memorandum for $2,060 which represents collection of a
customer’s note by the bank for the company; principal amount of the note was
$2,000 and interest was $60. Interest has not been accrued.
Required
Prepare a bank reconciliation statement in good form for the Circus Company at
April 30. Show all your calculation
Page 5 of 9
Question 4 {18 marks}
Company had a $300 balance in the Allowance for Doubtful Accounts account at
December 31, 2020, before the current year’s adjustment for uncollectible
accounts. An aging of the accounts receivable revealed the following:
Estimated Percentage
Uncollectible
Current Accounts $170,000 1%
1–30 days past due 15,000 3%
31–60 days past due 12,000 6%
61–90 days past due 5,000 15%
Over 90 days past due 9,000 30%
Total Accounts Receivable $211,000
Required
a) Calculate the estimated total uncollectable amount
b) Using a tabular summary, enter the unadjusted balances in the “Accounts
Receivable” and “Allowance for Doubtful Accounts” accounts
c) Record “Bad Debt Expense” balance at December 31, 2020.
Show all your calculation
Page 6 of 9
Question 5 {12 marks}
Required
A tractor that cost $36,000 and on which $26,500 of depreciation had been
recorded, was disposed of for $10,200.
a. Indicate whether a gain or loss should be recorded, and for what amount.
Assume that the tractor of Part (a), above, was instead discarded.
b. Indicate whether a gain or loss should be recorded, and for what amount.
Assume that the tractor of Part (a), above, was instead sold for $9,400.
c. Indicate whether a gain or loss should be recorded, and for what amount.
Show all your calculation
Page 7 of 9
Question 6 {17 marks}
The following stockholders’ equity accounts, arranged alphabetically, are in the records of
Marvel Corporation at December 31, 2020.
Common shares ($5 book value) $2,800,000
Contributed Capital in Excess of Par Value—Preferred shares 45,000
Contributed Capital in Excess of Book Value—Common shares 1,050,000
Preferred shares, 8%, $100 par, non-cumulative) 1,000,000
Retained Earnings 1,684,000
Treasury Shares (10,000 shares) 98,000
Required
Prepare the shareholders’ equity section of the balance sheet at December 31, 2020.
Page 8 of 9
Question 7 {10 marks}
The financial statements of the Precious Company appear below:
PRECIOUS COMPANY
Comparative Balance Sheet
December 31,
_________________________________________________________________________
Assets 2020 2019
Cash ………………………………………………………………………………… $ 25,000 $ 40,000
Debt investments ……………………………………………………………….. 20,000 60,000
Accounts receivable (net) …………………………………………………….. 50,000 30,000
Inventory …………………………………………………………………………… 140,000 170,000
Property, plant and equipment (net) ………………………………………. 170,000 200,000
Total assets ………………………………………………………………….. $405,000 $500,000
Liabilities and stockholders’ equity
Accounts payable ……………………………………………………………….. $ 25,000 $ 30,000
Short-term notes payable …………………………………………………….. 40,000 90,000
Bonds payable …………………………………………………………………… 75,000 160,000
Common shares …………………………………………………………………. 160,000 145,000
Retained earnings ………………………………………………………………. 105,000 75,000
Total liabilities and shareholders’ equity …………………………….. $405,000 $500,000
PRECIOUS COMPANY
Income Statement
For the Year Ended December 31, 2020
Net sales (all on credit) ……………………………………………………….. $360,000
Cost of goods sold ……………………………………………………………… 184,000
Gross profit ……………………………………………………………………….. 176,000
Expenses
Interest expense ……………………………………………………………. $11,000
Selling expenses …………………………………………………………… 30,000
Administrative expenses …………………………………………………. 20,000
Total expenses ………………………………………………………… 61,000
Income before income taxes ………………………………………………… 115,000
Income tax expense ……………………………………………………………. 35,000
Net income ………………………………………………………………………… $ 80,000
Additional information:
a. Cash dividends of $50,000 were declared and paid on common stock in 2020.
b. Weighted-average number of shares of common stock outstanding during 2020 was 50,000
shares.
c. Market price of common stock on December 31, 2020, was $16 per share.
d. Net cash provided by operating activities for 2020 was $70,000.
Page 9 of 9
Required
Using the financial statements and additional information above, compute the following ratios for
the Precious Company for 2020. Show all formulas and computations.
1. Current ratio _________.
2. Return on common stockholders’ equity _________.
3. Price-earnings ratio _________.
4. Inventory turnover _________.
5. Accounts receivable turnover _________.
6. Times interest earned _________.
7. Profit margin _________.
8. Days in inventory _________.
9. Payout ratio _________.
10. Return on assets _________.
The end of the assignment

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