Prepare the entry for retirement of preferred stock. ote: Enter debits before credits. Transaction (d) General Journal Debit Credit

Quickbooks Online Accounting
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ISBN:9780357391693
Author:Owen
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Chapter5: Operating Activities: Purchases And Cash Payments
Section: Chapter Questions
Problem 2.18C
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Can you help prepare the 2 attached journal entries for this example
 
The management of Banciu Corporation provides you with comparative balance sheets at December 31, 20X1, and December 31, 20X0, appearing below.
  December 31,
   20X1 20X0
Assets            
Cash $ 174,000   $ 223,200  
Accounts receivable   306,000     327,600  
Allowance for uncollectible accounts   (19,200 )   (20,400 )
Inventories   579,600     645,600  
Machinery and equipment   1,112,400     776,400  
Accumulated depreciation on machinery and equipment   (499,200 )   (446,400 )
Leasehold improvements   104,400     104,400  
Accumulated amortization on leasehold improvements   (69,600 )   (58,800 )
Securities held for plant expansion   180,000     0  
Patents   33,360     36,000  
Totals $ 1,901,760   $ 1,587,600  
Liabilities and stockholders’ equity            
Accounts payable $ 279,360   $ 126,000  
Dividend payable   48,000     0  
Current portion of 6% serial bonds payable   60,000     60,000  
6% serial bonds payable—noncurrent portion   300,000     360,000  
Preferred stock   108,000     120,000  
Common stock   600,000     600,000  
Retained earnings   506,400     321,600  
Totals $ 1,901,760   $ 1,587,600  
 

 

Supplemental Information:

a. The following table presents a comparative analysis of retained earnings as of December 31, 20X1, and December 31, 20X0.

 

  December 31,
  20X1   20X0
Beginning balance $ 321,600     $ 157,200  
Net income   234,000       206,400  
    555,600       363,600  
Dividends declared   (48,000 )     (42,000 )
Premium on repurchased preferred Stock   (1,200 )     -0-  

Ending balance

$ 506,400     $ 321,600  
 

b. On December 10, 20X1, the board of directors declared a cash dividend of $0.24 per share, payable to holders of common stock on January 10, 20X2.

c Purchased new machinery for $463,000. In addition, Banciu sold certain machinery it was no longer using for $57,600. The machinery cost $127,000 and had accumulated depreciation of $53,800 at the date of the sale. Banciu made no other entries in Machinery and equipment or related accounts other than for depreciation.

d. Purchased 120 preferred shares, par value $100, at $110 and subsequently canceled the shares. Banciu debited the premium paid to Retained earnings.

e. Paid $2,400 of legal costs in successful defense of a new patent, which it correctly debited to the Patents account. It recorded patent amortization amounting to $5,040 during the year ended December 31, 20X1.

f. During 20X1, Banciu wrote off accounts receivable totaling $3,600 as uncollectible.

g. During 20X1, Banciu purchased $180,000 of securities that are being held for future plant expansion.

Prepare the entry for retirement of preferred stock.
Note: Enter debits before credits.
Transaction
(d)
General Journal
Debit
Credit
Transcribed Image Text:Prepare the entry for retirement of preferred stock. Note: Enter debits before credits. Transaction (d) General Journal Debit Credit
Prepare the entry for additional depreciation adjustment for machinery and
equipment.
Note: Enter debits before credits.
Transaction
(C4)
General Journal
Debit
Credit
Transcribed Image Text:Prepare the entry for additional depreciation adjustment for machinery and equipment. Note: Enter debits before credits. Transaction (C4) General Journal Debit Credit
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