Three-part Accounting Assignment Lesson 21

Part A

1. After several years of business, Abel, Barney and Cole are liquidating. The following are post-closing account balances.

Cash                  18,000

Inventory           73,000

Other Asssets  157,000

Accounts Payable                         61,000

Abel, Capital                                  50,000

Barney, Capital             50,000

Cole, Capital                  87,000

Noncash assets are sold for $275,000. Profits and losses are shared equally.

After all liabilities are paid , divide the remaining cash amongst th partners.

2.The partners of Brandon and Ryan is being liquidated. All gains and losses are shared in a 3:1 ratio, respecively. Before liquidation, their balance sheet balances are as follows:

Cash                   $10,000

Other assets           8,000

Lialibities                 4,000

Brandon, Capital     7,000

Ryn, Capital            7,000

A. If th other Assets are sold for $10,000, how much will each partner receive before paying lialibities and distributing the remaining assets?

B.If the other Assets are sold for $8,000, how much will each partner receivebefore paying liabilities and distributing remaining assets?


Part B

1. Simon Brothers pay $47,000 into a bond sinking fund each year to redeem the future maturity of its bonds. During the first year, the fund earned $3825. At the time of the bond redemption, the fund has a balance of $417,000. Of this $400,000 was used to redeem the bonds. Journalize the following entries.

A. Initial deposit

B. The first year;s interest

C. The redemption of the bonds

2. On Janurary 1, auctions Online issued $300,000, 9%, 10-year bonds to lenders at the contract rate. Interest is to be paid semiannually on July 1 and Janurary 1. Journalize the following entries.

A. Issued the bonds

B. Paid first semiannual interest payment

C. Retired the bonds maturity


Part C

1. Prepare a statement of retired earnings in proper form for White Corporation for the year ended December 31, 2012, from the following:

Retained Earnings, Janurary 1, 2012                                                             $2,000

Dividends paid during the year                                                                            800

Net income for the year                                                                                     3,000

Correction of the prior year error. Purchase of land recorded as rent expense 1,000


2. Curtis Corporation’s balance sheet included the following:

Common stock, $5 par value, 5,000 shares issued and outstanding                25,000

Retained ernings                                                                                                20,000

Total Stockholders’ Equity                                                                                 $45,000

Prepare journal entries for the following transactions.

May 3 Issued 500 shares at $6 per share

May 9 Reacquired 100 shares at $4 per share

May 15 Reissued 50 of the Treasury shares at $7 per share

May 17 Reissued 10 of the Treasury shares at $3 per share