P12-30AAccounting, 9eP12-30AIssuing stock and preparing the stockholders' equity section of the balance sheetLO 3 [15-20 minutes]Students please fill-in areas that are shaded Student Name Course Name Student ID: Date:Lincoln-Priest, Inc., was organized in 2011. At December 31, 2011, the Lincoln-Priest balance sheet reported the following stockholders’ equity:LINCOLN-PRIEST, INC.Stockholders' EquityDecember 31, 2011Paid-in Capital: Preferred stock, 7%, $40 par, 110,000 shares authorized, none issued$0 Common stock, $1 par, 520,000 shares authorized, 61,000 shares issued and outstanding$61,000 Paid-in capital in excess of par - common41000Total paid-in capital$102,000Retained earnings29000Total stockholders' equity$131,000Requirements1.During 2012, the company completed the following selected transactions.Journalize each transaction. Explanations are not required.a. Issued for cash 1,300 shares of preferred stock at par value.b. Issued for cash 2,400 shares of common stock at a price of $5 per share.c. Net income for the year was $74,000, and the company declared no dividends. Make the closing entry for net income.2.Prepare the stockholders’ equity section of the Lincoln-Priest balance sheet atDecember 31, 2012.Test Your KnowledgeP12-30AReq. 1JournalDATEACCOUNTS AND EXPLANATIONSDEBITCREDITa.b.c.Req. 2LINCOLN-PRIEST, INC.Stockholders' EquityPaid-in capital: Paid-in capital in excess of par - common41,000 Total paid-in capital41,000Retained earningsTotal stockholder's equity$ 41,000*61,000 + 2,400 = 63,400 shares P12-29AAccounting, 9eP12-29AJournalizing corporate transactions and preparing the stockholders' equity section of the balance sheetLO 3 [20-25 minutes]Students please fill-in areas that are shaded Student Name Course Name Student ID: Date:B-Mobile Wireless needed additional capital to expand, so the business incorporated.The charter from the state of Georgia authorizes B-Mobile to issue 70,000 sharesof 5%, $100-par preferred stock, and 110,000 shares of no-par common stock.B-Mobile completed the following transactions:Oct 2Issued 19,000 shares of common stock for equipment with a market valueof $110,000.6Issued 800 shares of preferred stock to acquire a patent with a marketvalue of $80,000.9Issued 15,000 shares of common stock for cash of $90,000.Requirements1.Record the transactions in the general journal.2.Prepare the stockholders’ equity section of the B-Mobile balance sheet atOctober 31. The ending balance of Retained earnings is $92,000.Test Your KnowledgeP12-29AReq. 1JournalDATEACCOUNTS AND EXPLANATIONSDEBITCREDITOct 2Issued common stock to acquire equipment.6Issued preferred stock to acquire patent.9Issued common stock.Req. 2B-Mobile WirelessStockholders' EquityPaid-in capital: Total paid-in capitalRetained earningsTotal stockholder's equity$ - 0 student name goes here date turned in goes here P11-27AAccounting, 9eP11-.

1. P12-30AAccounting, 9eP12-30AIssuing stock and preparing the
stockholders' equity section of the balance sheetLO 3 [15-20
minutes]Students please fill-in areas that are shaded
Student Name Course Name Student ID:
Date:Lincoln-Priest, Inc., was organized in 2011. At December
31, 2011, the Lincoln-Priest balance sheet reported the
following stockholders’ equity:LINCOLN-PRIEST,
INC.Stockholders' EquityDecember 31, 2011Paid-in Capital:
Preferred stock, 7%, $40 par, 110,000 shares authorized, none
issued$0 Common stock, $1 par, 520,000 shares authorized,
61,000 shares issued and outstanding$61,000 Paid-in
capital in excess of par - common41000Total paid-in
capital$102,000Retained earnings29000Total stockholders'
equity$131,000Requirements1.During 2012, the company
completed the following selected transactions.Journalize each
transaction. Explanations are not required.a. Issued for cash
1,300 shares of preferred stock at par value.b. Issued for cash
2,400 shares of common stock at a price of $5 per share.c. Net
income for the year was $74,000, and the company declared no
dividends. Make the closing entry for net income.2.Prepare the
stockholders’ equity section of the Lincoln-Priest balance sheet
atDecember 31, 2012.Test Your KnowledgeP12-30AReq.
1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDITa.b.c.Req. 2LINCOLN-
PRIEST, INC.Stockholders' EquityPaid-in capital: Paid-in
capital in excess of par - common41,000 Total paid-in
capital41,000Retained earningsTotal stockholder's equity$
41,000*61,000 + 2,400 = 63,400 shares
P12-29AAccounting, 9eP12-29AJournalizing corporate
transactions and preparing the stockholders' equity section of
the balance sheetLO 3 [20-25 minutes]Students please fill-in
areas that are shaded Student Name Course Name
Student ID: Date:B-Mobile Wireless needed additional

2. capital to expand, so the business incorporated.The charter from
the state of Georgia authorizes B-Mobile to issue 70,000
sharesof 5%, $100-par preferred stock, and 110,000 shares of
no-par common stock.B-Mobile completed the following
transactions:Oct 2Issued 19,000 shares of common stock for
equipment with a market valueof $110,000.6Issued 800 shares
of preferred stock to acquire a patent with a marketvalue of
$80,000.9Issued 15,000 shares of common stock for cash of
$90,000.Requirements1.Record the transactions in the general
journal.2.Prepare the stockholders’ equity section of the B-
Mobile balance sheet atOctober 31. The ending balance of
Retained earnings is $92,000.Test Your KnowledgeP12-
29AReq. 1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDITOct 2Issued common stock to
acquire equipment.6Issued preferred stock to acquire
patent.9Issued common stock.Req. 2B-Mobile
WirelessStockholders' EquityPaid-in capital: Total paid-in
capitalRetained earningsTotal stockholder's equity$ - 0
student name goes here date turned in goes here
P11-27AAccounting, 9eP11-27AReport liabilities on the
balance sheetLO 4 [10-15 minutes]Students please fill-in areas
that are shaded Student Name Course Name
Student ID: Date: Link Back to Chapter 4 (Classified
Balance Sheet). The accounts of TaylorElectronics Company are
listed along with their balances before closing for themonth
ended March 31, 2012.Accounts payable$ 76,000Salary
payable$ 9,500Mortgage note payable, long-term80,000Bonds
payable, current installment30,000Interest
payable19,000Premium on all bonds payableBonds payable,
long-term164,000(all long-term)11,000Rory,
capital175,000Unearned service
revenue3,000Requirements1.Report these liabilities on the
Route Maker Wireless balance sheet, includingheadings and
totals for current liabilities and long-term liabilities.Test Your

3. KnowledgeP11-27AReq. 1Route Maker WirelessBalance Sheet
(partial)March 31, 2012LIABILITIESCurrent liabilities:
Total current liabilities- 0Long-term liabilities Total long-
term liabilities- 0Total liabilities$ - 0
student name here date here
P11-27AAccounting, 9eP11-27AReport liabilities on the
balance sheetLO 4 [10-15 minutes]Students please fill-in areas
that are shaded Student Name Course Name
Student ID: Date: Link Back to Chapter 4 (Classified
Balance Sheet). The accounts of TaylorElectronics Company are
listed along with their balances before closing for themonth
ended March 31, 2012.Accounts payable$ 76,000Salary
payable$ 9,500Mortgage note payable, long-term80,000Bonds
payable, current installment30,000Interest
payable19,000Premium on all bonds payableBonds payable,
long-term164,000(all long-term)11,000Rory,
capital175,000Unearned service
revenue3,000Requirements1.Report these liabilities on the
Route Maker Wireless balance sheet, includingheadings and
totals for current liabilities and long-term liabilities.Test Your
KnowledgeP11-27AReq. 1Route Maker WirelessBalance Sheet
(partial)March 31, 2012LIABILITIESCurrent liabilities:
Total current liabilities- 0Long-term liabilities Total long-
term liabilities- 0Total liabilities$ - 0
student name here date here
E12-19Accounting, 9eE12-19Calculating retained earningsLO 4
[10-15 minutes]Students please fill-in areas that are shaded
Student Name Course Name Student ID:
Date:Oulette Publishing Company has the following selected
account balances atJune 30, 2012.Inventory$ 112,000Common
stock, no par with $0.50Machinery and equipment108,000stated
value, 900 sharesDividends8,000authorized and

4. issued450Depreciation expense9,000Accumulated
depreciation61,000Rent expense19,000Salary
expense85,000Utilities expense5,000Retained earnings, June 30,
2011114,000Cost of goods sold81,000Sales
revenue240,000Requirements1.Journalize all required closing
entries for the year.2.Calculate the balance in Retained earnings
at June 30, 2012. Use a T-account toshow your calculations.Test
Your KnowledgeE12-19Req. 1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDITJune 30Sales revenue
Income summaryClose the revenue accounts30Income summary
Cost of goods sold Depreciation expense Rent expense
Salary expense Utilities expenseClose the expense
accounts30Income summary Retained earningsClose the
income summary.30Retained earnings DividendsReq.
2Retained earingsBal.114,000- 0End Bal114,000
JLM april
E12-17Accounting, 9eE12-17Issuing stock and preparing the
stockholders' equity section of the balance sheetLO 3 [15-20
minutes]Students please fill-in areas that are shaded
Student Name Course Name Student ID:
Date:The charter for KCAS-TV, Inc., authorizes the company to
issue 100,000 shares of$4, no-par preferred stock and 500,000
shares of common stock with $1 par value.During its start-up
phase, KCAS completed the following transactions:Sept 6Issued
275 shares of common stock to the promoters who organized the
corporation,receiving cash of $8,250.12Issued 400 shares of
preferred stock for cash of $20,000.14Issued 1,600 shares of
common stock in exchange for land valued at $18,000.30Closed
net income of $32,000 into Retained
earnings.Requirements1.Record the transactions in the general
journal.2.Prepare the stockholders’ equity section of the KCAS-
TV balance sheet atSeptember 30, 2012.Test Your
KnowledgeE12-17Req. 1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDITSep 6Sep 12Sep 14Sep 30Req.

5. 2KCAS-TVStockholders' EquitySeptember 30, 2012Paid-in
capital: Preferred stock, no par, 100,000 shares
authorized, 400 shares issued$ - 0- 0- 0- 0- 0Total
stockholder's equity$ - 0
student name date here
E11-19Accounting, 9eE11-19Journalizing bond transactions -
year-end interest accrualLO 3 [10 minutes]Students please fill-
in areas that are shaded Student Name Course Name
Student ID: Date:Filmore Homebuilders issued $250,000
of 8%, 10-year bonds at par on September 30,2012. Filmore
pays semiannual interest on March 31 and September
30.Requirements1.Journalize the issuance of the bonds payable
on September 30, 2012.2.Journalize the accrual of interest on
December 31, 2012.3.Journalize the second payment on
February 28, 2013 (do not round).Test Your KnowledgeE11-
19Req. 1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT2012Jan 1Issued bonds at
par.Req. 2JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT2012Dec 31Req.
3JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT2013Mar 31
student. date
E11-14Accounting, 9eE11-14Recording mortgage payable
entries from an amortization scheduleLO 1 [10-15
minutes]Students please fill-in areas that are shaded
Student Name Course Name Student ID:
Date:Kaiser Company’s partial amortization schedule
follows:Payment NumberDatePaymentInterest Expense
(Principal X 6% X 1/12)PrincipalMortgage BalanceLoan1/1/13$
500,000.0011/31/133,597.302,500.001,097.30498,902.7022/28/1
33,597.302,494.511,102.79497,799.9133/31/133,597.302,489.00
1,108.30496,691.6144/30/133,597.302,483.461,113.84495,577.7

6. 755/31/133,597.302,477.891,119.41494,458.3666/30/133,597.30
2,472.291,125.01493,333.3577/31/133,597.302,466.671,130.634
92,202.7288/31/133,597.302,461.011,136.29491,066.4399/30/13
3,597.302,455.331,141.97489,924.461010/31/133,597.302,449.6
21,147.68488,776.781111/30/133,597.302,443.881,153.42487,6
23.361212/31/133,597.302,438.121,159.18486,464.182013
totals43,167.6029,631.7813,535.82Requirements1.Journalize
the note issuance and the reclassification of the current portion
onJanuary 1, 2013 (explanations are not required).2.What is the
balance in Estimated warranty payable?3.Journalize the second
payment on February 28, 2013 (do not round).Test Your
KnowledgeE11-14Req. 1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT2013Jan 1Jan 1Req.
2JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT2013Jan 31Req.
3JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT2013Feb 28
P10-16AAccounting, 9eP10-16AJournalizing liability
transactionsLO 2 [20-25 minutes]Students please fill-in areas
that are shaded Student Name Course Name
Student ID: Date:The following transactions of Brooks
Garrett occurred during 2012:Apr 30Garrett is party to a patent
infringement lawsuit of $200,000. Garrett’s attorneyis certain it
is remote that Garrett will lose this lawsuit.Jun 30Estimated
warranty expense at 2% of sales of $400,000.Jul 28Warranty
claims paid in the amount of $6,000.Sep 30Garrett is party to a
lawsuit for copyright violation of $100,000. Garrett’sattorney
advises that it is probable Garrett will lose this lawsuit.Dec
31Garrett estimates warranty expense on sales for the second
half of the year of$500,000 at 2%.Requirements1.Journalize
required transactions, if any, in Garrett’s general
journal.Explanations are not required.2.What is the balance in
Estimated warranty payable?Test Your KnowledgeP10-16AReq.
1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT2012Apr 30Jun 30Jul 28Sep

7. 30Dec 31Req. 2Estimated warranty payableJul 28- 0Jun 30-
0Dec 31- 0End Bal- 0
student. date
P10-15AAccounting, 9eP10-15AJournalizing liability
transactionsLO 1, 2 [30-40 minutes]Students please fill-in areas
that are shaded Student Name Course Name
Student ID: Date:The following transactions of Denver
Pharmacies occurred during 2011 and 2012:2011Jan 9Purchased
computer equipment at a cost of $9,000, signing a six-month,6%
note payable for that amount.29Recorded the week’s sales of
$64,000, three-fourths on credit, andone-fourth for cash. Sales
amounts are subject to a 6% state sales tax.Feb 5Sent the last
week’s sales tax to the state.28Borrowed $204,000 on a four-
year, 10% note payable that calls for $51,000annual installment
payments plus interest. Record the current andlong-term
portions of the note payable in two separate accounts.Jul 9Paid
the six-month, 6% note, plus interest, at maturity.Aug
31Purchased inventory for $12,000, signing a six-month, 9%
note payable.Dec 31Accrued warranty expense, which is
estimated at 2% of sales of $603,000.31Accrued interest on all
outstanding notes payable. Make a separateinterest accrual for
each note payable.2012Feb 28Paid the first installment and
interest for one year on the four-year notepayable.29Paid off the
9% note plus interest at maturity.Requirements1.Journalize the
transactions in Denver’s general journal. Explanations are
notrequired.Test Your KnowledgeP10-15AReq.
1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT2011Jan 9Jan 29Cash ($64,000
X 1/4 X 1.06)16,960Feb 5Feb 28Jul 9Aug 31Dec 3131
Interest payable- 0312012Feb 28Feb 28
Student name here Date here
P9-30AAccounting, 9eP9-30ANatural resource accountingLO 4

8. [15-20 minutes]Students please fill-in areas that are shaded
Student Name Course Name Student ID:
Date:McCabe Oil Company has an account titled Oil and gas
properties. McCabe paid$6,200,000 for oil reserves holding an
estimated 500,000 barrels of oil. Assume thecompany paid
$510,000 for additional geological tests of the property and
$490,000to prepare for drilling. During the first year, McCabe
removed 90,000 barrels of oil,which it sold on account for $39
per barrel. Operating expenses totaled $850,000, allpaid in
cash.Requirements1.Record all of McCabe’s transactions,
including depletion for the first year.Test Your KnowledgeP9-
30AReq. 1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT
Jennie April 23
P9-29AAccounting, 9eP9-29ALump sum asset purchases, partial
year depreciation, and impairmentsLO 2,3 [20-25
minutes]Students please fill-in areas that are shaded
Student Name Course Name Student ID:
Date:Gretta Chung Associates surveys American eating habits.
The company’s accountsinclude Land, Buildings, Office
equipment, and Communication equipment, with aseparate
accumulated depreciation account for each asset. During 2012
and 2013,Gretta Chung completed the following
transactions:2012Jan 1Traded in old office equipment with book
value of $40,000 (cost of $132,000and accumulated
depreciation of $92,000) for new equipment. Chung alsopaid
$80,000 in cash. Fair value of the new equipment is
$119,000.Apr 1Acquired land and communication equipment in
a group purchase. Totalcost was $270,000 paid in cash. An
independent appraisal valued the landat $212,625 and the
communication equipment at $70,875.Sep 1Sold a building that
cost $555,000 (accumulated depreciation of $255,000through
December 31 of the preceding year). Chung received
$370,000cash from the sale of the building. Depreciation is

9. computed on astraight-line basis. The building has a 40-year
useful life and a residualvalue of $75,000.Dec 31Recorded
depreciation as follows:→Communication equipment is
depreciated by the straight-line method over afive-year life with
zero residual value.→Office equipment is depreciated using the
double-declining-balance method overfive years with $2,000
residual value.2013Jan 1The company identified that the
communication equipment suffered significantdecline in value.
The fair value of the communication equipment wasdetermined
to be $55,000.Requirements1.Record the transactions in the
journal of Gretta Chung Associates.Test Your KnowledgeP9-
29AReq. 1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT2012Jan. 1Office equipment
(new)Apr. 1Sept. 1Sept. 1Dec. 31Dec. 312013Jan. 1
Jennie April 23
E10-13Accounting, 9eE10-13Computing and recording gross
and net payLO 3,4 [10-15 minutes]Students please fill-in areas
that are shaded Student Name Course Name
Student ID: Date:Henry Striker manages a Frosty Boy
drive-in. His straight-time pay is $10 per hour,with time-and-a-
half for hours in excess of 40 per week. Striker’s payroll
deductionsinclude withheld income tax of 8%, FICA tax of
7.65%, and a weekly deductionof $5 for a charitable
contribution to the United Fund. Striker worked 52hours during
the week.Requirements1.Compute Striker’s gross pay and net
pay for the week. Carry amounts to thenearest cent.2.Journalize
Frosty Boy’s wage expense accrual for Striker’s work. An
explanationis not required.3.Journalize the subsequent payment
of wages to Striker.Test Your KnowledgeE10-13Req. 1Straight-
time earnings for 40 hours (40 X $10)$ 400.00Overtime pay
for the next 12 hours:Deductions: Withheld income tax 8%- 0
FICA tax 7.65%- 0 United Fund contribution5.00Total
deductions5.00Net payReq. 2JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDITReq.

10. 3JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT
Good student getting tired April 23
E10-11Accounting, 9eE10-11Journalizing current liabilitiesLO
1 [15 minutes]Students please fill-in areas that are shaded
Student Name Course Name Student ID:
Date:Edmund O’Mally Associates reported short-term notes
payable and salary payableas follows:20122011Current
liabilities (partial)Short-term notes payable$ 16,400$
15,600Salary payable3,4003,100During 2012, O’Mally paid off
both current liabilities that were left over from 2011,borrowed
money on short-term notes payable, and accrued salary
expense.Requirements1.Journalize all four of these transactions
for O’Mally during 2012.Test Your KnowledgeE10-11Req.
1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT2012
Jennie April 23
E9-24Accounting, 9eE9-24Acquisition of patent, amortization,
and change in useful lifeLO 5 [10-15 minutes]Students please
fill-in areas that are shaded Student Name Course
Name Student ID: Date:Miracle Printers (MP)
manufactures printers. Assume that MP recently paid
$600,000for a patent on a new laser printer. Although it gives
legal protection for 20 years, thepatent is expected to provide a
competitive advantage for only eight
years.Requirements1.Assuming the straight-line method of
amortization, make journal entries torecord (a) the purchase of
the patent and (b) amortization for year 1.2.After using the
patent for four years, MP learns at an industry trade show
thatanother company is designing a more efficient printer. On
the basis of this newinformation, MP decides, starting with year
5, to amortize the remaining cost ofthe patent over two

11. remaining years, giving the patent a total useful life of sixyears.
Record amortization for year 5.Test Your KnowledgeE9-24Req.
1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDITReq. 1Purchase of
patent(a)(b)Amortization for one year:Req. 2Amortization for
year 5:Calculate book valueOrginal cost$600,000Accm
Depreciation:Year 1Year 2Year 3Year 4- 0Book value at beg of
Yr 5600,000New estimated useful life remainingNew annual
amortization
Jennie April 23
E9-20Accounting, 9eE9-20Partial year depreciation and sale of
an assetLO 2, 3 [10-15 minutes]Students please fill-in areas that
are shaded Student Name Course Name
Student ID: Date:On January 2, 2012, Repeat Clothing
Consignments purchased showroom fixturesfor $11,000 cash,
expecting the fixtures to remain in service for five years.
Repeathas depreciated the fixtures on a double-declining-
balance basis, with zero residualvalue. On October 31, 2013,
Repeat sold the fixtures for $6,200 cash.Requirements1.Record
both depreciation for 2013 and sale of the fixtures on October
31, 2013.Test Your KnowledgeE9-20Req.
1JournalDATEACCOUNTS AND
EXPLANATIONSDEBITCREDIT2013Depreciation for 10
months:Oct 31Sale of fixtures:Oct 31 Gain on sale of
fixtures1,800Calculate 2012 depreciation:You can also use DDB
function in excel: DDB =$4,400for 2012DDB =for 10 mo.
2013Calculate 2013 depreciationGain is computed as
follows:Sale price of old fixtures$ 6,200Book value of old
fixtures: Cost$11,000 Less: Accm depreciationAccm.
Depr.Gain on sale………………………………………………….
Jennie April 23