Question

Please answer all parts

1. Journalize entry

(Find information from the month before in the beginning balance of the general ledger)

that occurred in July are as follow July 1 Paid salaries for the pay period ended June 30. 1 Purchased inventory in preparation for the 4th of July for $370,000 on account, 2%/10, N/30. 4 Firework sales July total $760,000. $300,000 of these sales are on account, with the rest of the customers paying cash. The cost of the units sold is $320,000. 7 Purchased a 5-year bond. Face value S250.000, stated interest rate 5%, market interest rate 7% with semi-annual interest payments due June 30 and December 31 (round to the nearest dollar) 9 Paid for the inventory purchased on July 1 within terms. 15 Received $400,000 from customers on accounts receivable. 16 Provide services to customers for cash, $49,700. 16 Pay cash for salaries, $79,000. 26 Sold 500 shares of treasury stock for $28 per share. (bought in May for $18) 27 Write off accounts receivable as uncollectible, $3,000. 28 Purchased $5,000 in supplies for cash 29 Received bill for July utilities, $16,000. 31 Firework sales for the balance of July total $160,000 on account. The cost of the units sold is $100,000. 31 Pay the third monthly installment of $990 related to the $50,000 borrowed on May1. Round your interest calculation to the nearest dollar 31 Pay the cash dividend declared on June 28. Information for the adjusting entries as of the end of July are as follow Depreciation on the building for the month of July is calculated using the straight-line method. At the time the building was purchased, the company estimated a service life of 29 years and a residual value of $20,000. Depreciation on the equipment is calculated using the double-declining balance method with a four-ycar service live and no residual value. a. At the end of June, s33 ,400 ofaccounts receivable are past due, and the company estimates that 40% of those accounts will not be collected. Of the remaining accounts receivable, the company estimates that 596 will not be collected. b. c. Unpaid salaries at the end of July are $43,600. d. By the end of July, all of the gift cards sold on May 12 have been redeemed. The revenue from the gift cards is considered service revenue. e. A count of the supplies on hand at the end of July shows a total of $5,500. . One month of liability insurance has expired. g. Accrue interest payable on the note issued (5% six month note) in relation to the June purchase of land for July, Round your interest calculation to the nearest dollar. Income taxes due for the month of July are $140,000. h.

2. Record General Ledger

3. Record Income statement

4. Record statement of stockholder’s equity

5. Record Balance Sheet

6. Record Cash Flow Statement

7. Record Post-Closing Trial Balance

Answer 1

Working for Bond started interest rate = 5% Market interest rate = 7% Interest payout = Half-yarly Since interest payments are made on a semi-annual basis, the total number of coupon payment is 5 years times 2 = 10, and the interest rate per period is 7 % 2 = 3. 5%. Using this information, the present value of principle repayment at maturity is rightarrow PV(Principal) = $250, 000/(1. 35) ^10 = $177230 Present value of coupon payments- The coupon rate per period = 51/2 = 2. 5% Each interest payment per period = 2. 5% times $250, 000 = $6250 PV(coupon) = (6250/1. 025) + (6250/(1. 025) ^2) + (6250/(1. 025) ^3) + (6250/(1. 025) ^4) + (6250/(1. 025) ^5) + (6250/(1. 025) ^6) + (6250/(1. 025) ^7) + (6250/(1. 025) ^8) + (6250/(1. 025) ^9) + (6250/(1. 025) ^10) = $54700 The sum of present value of coupon payments and principle is the market price of the bond market price = $177230 + $54700 = $231930