General Accounting- P3

Q1) On January 1, 2011, CR Company. issued a $500,000, 5 year, 8% installment note payable with payments of $100,000 principal plus interest due on January 1 of each year for the next 5 years.

A) Prepare the adjusting journal entry at December 31, 2011 to accrue interest for the year

=??

=??

B) Show the account and amount and where it will appear on a multi-step income statement prepared on December 31, 2011.

Account=??  Where=?? Amount=??

 

C) Show the account(s) and amount(s) and where they will appear on a classified balance sheet prepared on December 31, 2011.

Current Liabilities:  =??

                                 =??

Long-Term Liabilities:  =??

 

Q-2 – Journalize the following selected transactions completed during the current fiscal year:Jan. 3 – the directors declared a stock split which reduced the par of common share from $100 to $20. this action increased the number of outstanding shares to 400,000.

Jan. 22- Declared a dividend of $1.50 per share on the outstanding shares of common stock.

Feb. 8 – Paid the dividend declared on January 22.

Sep. 1 – Declared a 5% stock dividend on the common stock outstanding ( the fair market value of the stock to be issued is $30).

Oct. 1- Issued the certificates for the common stock dividend declared on September 1.

Jan 3 =??

         =??

Jan 22 =??

           =??

Feb 8  =??

           =??

Sep 1=??

         =??

         =??

Oct 1  =??

          =??

Q-3

MS has five sales employees which receive weekly paychecks. Each earns $11.50 per hour and each has worked 40 hours in the pay period. Each employee pays 12% of gross in Federal Income Tax, 3% in State Income Tax, 6% of gross in Social Security Tax, 1.5% of gross in Medicare Tax, and 1/2% in State Disability Insurance.

Journalize the recognition of the pay period ending January 19th which will be paid to the employees January 26th. (Keep in mind that none of the employees is subject to a ceiling amount for social security.)

 

Jan 19 =??, =??, =?? , =??, =??, =??, =??

 

Q-5- FK Construction installs swimming pools. They calculate that warranty obligations are 3% of gross sales. For the year just ending F K gross sales were $1,450,000. Due to previous quarter recognitions, the Warranty Liability account has a credit balance of $28,700.

Determine the year’s total warranty liability. =???

Journalize any necessary value to establish the year’s liability at December 31st.

=??

=??