Question

Correct my mistakes please and give explanation if possible thank you.

On January 1, 2021, the general ledger of Grand Finale Fireworks includes the following account balances: Debit $ 43,600 46,300 8,400 73,000 Credit Accounts Cash Accounts Receivable Supplies Equipment Accunulated Depreciation Accounts Payable Common Stock, $1 par value Additional Paid-in Capital Retained Earnings $ 9,900 15,500 19,000 89,000 37,900 $171,300 $171,300 Totals During January 2021, the following transactions occur January 2 Issue an additional 2,100 shares of $1 par value common stock for $42,000 January 9 Provide servicesIto customers on account, $16,300. January 10 Purchase additioñal supplies on account, $5,800 January 12 Purchase 1,200 shares of treasury stock for $22 per share. January 15 Pay cash on accounts payable, $17,400. January 21 Provide services to customers for cash, $50,000. January 22 Receive cash on accounts receivable, $17,500. January 29 Declare a cash dividend of $0.40 per share to all shares outstanding on January 29. The dividend is payable es on February 15. (Hint: Grand Finale Fireworks had 19,000 shares outstanding on January 1, 2021, and dividends are not paid on treasury stock.) January 30 Resell 700 shares of treasury stock for $24 per share. January 31 Pay cash for salaries during January, $42,900 The following information is available on January 31, 2021. a. Unpaid utilities for the month of January are $7,100. b. Supplies at the end of January total $6,000. c. Depreciation on the equipment for the month of January is calculated using the straightline method. At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $10,900. d. Accrued income taxes at the end of January are $2,000.

-General journal

-Balance sheet

-Analysis

Answer 1

Grand Finale Fireworks Journal Enteries Date Particulars 2.1.2021 Cash a/c Dr. To Common Stock To Paid in Capital in excess of par (Additional capital issued) Debit in $ Credit in $ 42000 2100 39900 16300 9.1.2021 Accounts Receivable a/c Dr. To Service Revenue (Service provided on account) 16300 5800 10.1.2021 Supplies a/c Dr. To Accounts Payable (Supplies purchased on account) 5800 27600 12.1.2021 Treasury Shares a/c Dr. To Cash (Treasury shares purchased) 1200 x 23 27600 17400 15.1.2021 Accounts Payable a/c Dr,. To Cash (Accounts Payable paid off) 17400 50000 21.1.2021 Cash a/c Dr. To Service Revenue (Service provided in cash) 50000 Dr. 17500 22.1.2021 Cash a/c To Accounts Receivable (Cash received from debtors) 17500 7960 29.1.2021 Dividend a/c Dr. To Dividend Payable (Dividend declared) (19000+2100-1200) x 0.3 7960 30.1.2021 Cash a/c Dr. 16800 To Treasury Stock 16100 To Paid in Capital in excess of par 700 (Treasury shares reissued) 700 x 24 = 16800 ; 700 x 23 = 16100 Dr. 42900 31.1.2021 Salaries Expense a/c To Cash (Salaries paid in cash) 42900

Adjusting Enteries Date Particulars 31.1.2021 Utilities Expense a/c To Accounts Payable (Expenses accrued) Dr. Debit in $ Credit in $ 7100 7100 8200 31.1.2021 Supplies Expense a/c Dr. To Supplies (Supplies expensed) 8400+5800-6000 8200 1725 1725 31.1.2021 Depreciation Expense - Equip a/c Dr. To Accum. Depre - Equip (Depreciation charged to Equip) (73000-10900)/( 12 x 3) Dr. 2000 31.1.2021 Income Tax Expense a/c To Income Tax Payable (Income Tax accrued) 2000 Closing Enteries Date Particulars 31.1.2021 Income Summary a/c Dr. To Salaries Expense To Utilities Expense To Supplies Expense To Depreciation Expense - Equip To Income Tax Expense (Expense accounts closed) Debit in $ Credit in $ 61925 42900 7100 8200 1725 2000 Dr. 66300 31.1.2021 Service Revenue a/c To Income Summary (Revenue accounts closed 66300 Dr. 4375 31.1.2021 Income Summary a/c To Retained Earnings (Profits Transferred) 4375 Dr. 7960 31.1.2021 Retained Earnings a/c To Dividends (Dividends charged) 7960

Trial Balance For the period ending 31.1.2021 Particulars Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Dividend Payable Income Tax Payable Common Stock $1 par value Additional Paid in Capital Additional Paid in Capital - Treasury Retained Earnings Treasury Shares Dividend Service Revenue Salaries Expense Utilities Expense Supplies Expense Depreciation Expense - Equip Income Tax Expense Totals Unadjusted Adjustments Adjusted Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 81900 81900 44900 44900 14100 8200 5900 72000 72000 9800 1725 11525 3800 7100 10900 7960 7960 2000 2000 20100 20100 127900 127900 700 700 38700 38700 11500 11500 7960 7960 66300 66300 42900 42900 7100 7100 8200 8200 1725 1725 2000 2000 275260 275260 19025 19025 286085 286085 Statement of Income For the period ending 31.1.2021 Service Revenue 66300 Salaries Expense Utilities Expense Supplies Expense Depreciation Expense - Equip 42900 7100 8200 1725 59925 6375 -2000 4375 Income Tax Expense Net Income Statement of Retained Earnings For the period ending 31.1.2021 Beginning Net Income 38700 4375 43075 -7960 Dividend 35115

Amounts in $ Amounts in $ Balance sheet As at 31.1.2021 Assets Current Assets Cash Accounts Receivable Supplies Amounts in $ Amounts in $ Liabilities Current Liabilities 81900 Accounts Payable 44900 Dividend Payable 5900 132700 Income Tax Payable 10900 7960 2000 20860 Non Current Assets Equipment Accumulated Depreciatioi Total Assets Share holders Equity Common Stock $1 par value Additional Paid in Capital Additional Paid in Capital - Treasury Retained Earnings 60475 Treasury Shares 193175 Total Liabilities & Equity 20100 127900 700 35115 -11500 72000 -11525 172315 193175 Return on Equity = Net Income / Total Equity = 4375 / (19000 + 89000 + 37900 + 172315)/2 = 4375 / 159108 = 2.75% The Company is more profitable than other companies Number of shares outstanding = 19000 +2100-1200 + 700 = 20600 Earning per share = 4375 / (19000 + 20600)/2 = 4375 / 19800 = $0.221 Grand Final Fireworks has better EPS this year