Question

Check my work On January 1, 2021, the general ledger of Grand Finale Fireworks includes the following account balances: Accounts Debit Credit 43,200 45,500 8,000 Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Accounts Payable Conmon Stock, $1 par value Additional Paid-in Capital Retained Earnings 15 points 69,000 $ 9,500 15,100 15,000 85,000 41,100 $165,700 $165,700 eBook References Totals During January 2021, the following transactions occur January 2 Isasue an additional 2,000 shares of 1 par value comnon atock for $40,000 January Provide services to customers on account, $15,600 January 10 Purchase additional aupplien on account, $5,400. January 12 Purchase 1,200 ahares of treasury stock for $17 per share. January 15 Pay cash on accounts payable, $17,000. January 21 Provide services to custoners for cash, $49,600. January 22 Receive cash on accounts receivable, $17,100. January 29 Declare a cash dividend of $0.30 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hinti Grand Finale Fireworks had 15,000 shares outstanding on January 1, 2021, and dividends are not paid on treasury stock.) January 30 Resell 800 shares of treasury stock for $19 per share. January 31 Pay cash for salaries during January, $42,500. 10

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 $ 40000 2000 38000 I 15600 9.1.2021 Accounts Receivable a/c Dr. To Service Revenue (Service provided on account) 15600 5400 10.1.2021 Supplies a/c Dr. To Accounts Payable (Supplies purchased on account) 5400 20400 12.1.2021 Treasury Shares a/c Dr. To Cash (Treasury shares purchased) 1200 x 17 20400 17000 15.1.2021 Accounts Payable a/c Dr. To Cash (Accounts Payable paid off) 17000 49600 21.1.2021 Cash a/c Dr. To Service Revenue (Service provided in cash) 49600 Dr. 17100 22.1.2021 Cash a/c To Accounts Receivable (Cash received from debtors) 17100 29.1.2021 Dividend a/c 4740 To Dividend Payable (Dividend declared) (15000 + 2000 - 1200) x 0.3 4740 Dr. 15200 30.1.2021 Cash a/c To Treasury Stock To Paid in Capital in excess of par (Treasury shares reissued) 13600 1600 Dr. 42500) 31.1.2021 Salaries Expense a/c To Cash (Salaries paid in cash) 42500

Adjusting Enteries Date Particulars 31.1.2021 Utilities Expense a/c To Accounts Payable (Expenses accrued) Dr. Debit in $ Credit in $ 6700 6700 7800 31.1.2021 Supplies Expense a/c Dr. To Supplies (Supplies expensed) 8000 + 5400 - 5600 7800 1625 1625 31.1.2021 Depreciation Expense - Equip a/c Dr. To Accum. Depre - Equip (Depreciation charged to Equip) 69000/(12 x 3) Dr. 2500 31.1.2021 Income Tax Expense a/c To Income Tax Payable (Income Tax accrued) 2500

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 $ 85200 85200 44000 44000 13400 7800 5600 69000 69000 9500 1625 11125 3500 6700 10200 4740 4740 2500 2500 17000 17000 123000 123000 1600 1600 41100 41100 6800 4740 4740 65200 65200 42500 42500 6700 6700 7800 7800 1625 1625 2500 2500 265640 265640 18625 18625 276465 276465 6800

Statement of Income For the period ending 31.1.2021 Service Revenue 65200 Salaries Expense Utilities Expense Supplies Expense Depreciation Expense - Equip 42500 6700 7800 1625 58625 6575 -2500 4075 Income Tax Expense Net Income Statement of Retained Earnings For the period ending 31.1.2021 Beginning Net Income 41100 4075 45175 -4740 40435 Dividend

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 85200 Accounts Payable 44000 Dividend Payable 5600 134800 Income Tax Payable 10200 4740 2500 17440 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 57875 Treasury Shares 192675 Total Liabilities & Equity 17000 123000 1600 40435 -6800 69000 - 11125 175235 192675 Return on Equity = Net Income / Total Equity = 4075 / (15000 + 85000 + 41100 + 175235)/2 = 4075 / 158168 = 2.58% The Company is more profitable than other companies Number of shares outstanding = 15000+2000-1200 + 800 = 16600 Earning per share = 4075 / (15000 + 16600)/2 = 4075 / 15800 = $0.257 Grand Final Fireworks has better EPS this year