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ACCT 221 WEEK 1 HOMEWORK SOLUTION

ACCT 221 WEEK 1 HOMEWORK SOLUTION

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The stockholders equity section of the balance sheet of Frederick Mining Company is as follows:
 
 
 
 
 
Frederick Mining Company
 
 
Equity Section of Balance Sheet as of January 1, 2016
 
 
Common stock, $10 par value, 200,000 shares authorized
 
 
 
   120,000 shares issued
 1 200 000
 
 
Paid-in capital in excess of par value
 3 711 250
 
 
Retained earnings
 4 651 255
 
 
   Total equity
 $9 562 505
 
 
 
 
 
 
 
 
 
 
REQUIRED:
 
 
 
1.  Create a journal entry (if needed) for each of the following items.  
 
 
2.  Prepare an updated equity section of the balance sheet as of December 31, 2016.  Scroll down past the journal entry section to see the heading for this.
 
 
 
 
28.01.16
Frederick Mining enters into a loan-modification agreement with the bank, agreeing to appropriate $550,000 of retained earnings to loan repayment.
15.02.16
Frederick Mining board of directors declares a $1.50-per-share dividend payable on 3/31/2016 to shareholders of record as of 3/15/2016. Frederick uses a dividends account to record dividends declared.
31.03.16
Cash dividend declared on 2/15/2016 is paid.
 
 
22.07.16
Frederick Mining board of directors declares a 10% stock dividend to be paid 8/15/2016 to shareholders of record as of 8/1/2016. The market value of the stock is $59 immediately prior to the declaration.
15.08.16
Stock dividend declared on 7/22/16 is paid.
 
 
18.09.16
Frederick Mining buys back 6,000 shares of company stock on the open market for $52 per share. The purchased shares are not retired but are held in treasury.
31.12.16
Frederick Mining had the following income and expense account balance as of 12/31/2016. Close out income.
 
 
 Debit 
 Credit 
 
Sales revenue
 
 6 890 000
 
Cost of goods sold
 4 752 600
 
 
Administrative salary expense
 436 500
 
 
Office expense
 118 560
 
 
Depreciation expense
 12 000
 
 
Transportation expense
 18 400
 
 
Interest expense
 82 800
 
 
 
 
 
31.12.16
Close out dividends.
 
 
 
 
 
 
1.  Create a journal entry (if needed) for each items.  
 
 
DATE
JOURNAL ENTRY
 DEBIT 
 CREDIT 
 
 
 
2.  Prepare an updated equity section of the balance sheet as of December 31, 2016.  
 
 
 
 
 
 
 
Frederick Mining Company
 
Equity Section of Balance Sheet as of December 31, 2016
 
 
 


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