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Accounting 4 problems

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E10-1 Megan Haak and Kathy Quandt borrowed $15,000 on a 7-month, 8% note from
Golden State Bank to open their business, MK’s Coffee House. The money was borrowed
on June 1, 2012, and the note matures January 1, 2013.


Instructions
(a) Prepare the entry to record the receipt of the funds from the loan.
(b) Prepare the entry to accrue the interest on June 30.
(c) Assuming adjusting entries are made at the end of each month, determine the balance
in the interest payable account at December 31, 2012.
(d) Prepare the entry required on January 1, 2013, when the loan is paid back.


E10-13 Pedrick, Inc. reports the following liabilities (in thousands) on its January 31, 2012, balance sheet and notes to the financial statements.
Prepare liabilities section of balance sheet.
Accounts payable $4,263.9 Mortgage payable $6,746.7
Accrued pension liability 1,115.2 Operating leases 1,641.7
Unearned sales revenue 1,058.1 Notes payable (due in 2015) 335.6
Bonds payable 1,961.2 Salaries and wages payable 858.1
Current portion of Notes payable (due in 2013) 2,563.6
mortgage payable 1,992.2 Unused operating line of credit 3,337.6
Income taxes payable 265.2 Warranty liability—current 1,417.3

Instructions
(a) Identify which of the above liabilities are likely current and which are likely long-term. Say if an item fits in neither category. Explain the reasoning for your selection

E11-2 Dukas Co. had these transactions during the current period.
Journalize issuance of common stock and preferred stock and purchase of treasury stock.
June 12 Issued 80,000 shares of $1 par value common stock for cash of $300,000.
July 11 Issued 3,000 shares of $100 par value preferred stock for cash at $106 per share.
Nov. 28 Purchased 2,000 shares of treasury stock for $9,000.
Instructions
Prepare the journal entries for the Dukas Co. transactions

E11-10 The following accounts appear in the ledger of Sather Inc. after the books are closed at December 31, 2012.

Prepare a stockholders’ equity section.
Common Stock (no-par, $1 stated value, 400,000 shares authorized, 250,000 shares issued) $ 250,000
Paid-in Capital in Excess of Stated Value—Common Stock 1,200,000
Preferred Stock ($50 par value, 8%, 40,000 shares authorized, 14,000 shares issued) 700,000
Retained Earnings 920,000
Treasury Stock (9,000 common shares) 64,000
Paid-in Capital in Excess of Par Value—Preferred Stock 24,000

Instructions
Prepare the stockholders’ equity section at December 31, assuming $100,000 of retained earnings is restricted for plant expansion. (Use Note R.)

ACC504 Week 6 E10-1 E10-13 E11-2 E11-10

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