Accounting Assignment | College Homework Help
March 16th, 2020
After establishing their company’s fiscal year-end to be October 31, Natalie and Curtis begin operating Cookie & Coffee Creations Inc. on November 1, 2020. On that date, after the issuance of shares, the paid-in capital section of the company’s balance sheet is as follows. Paid-in capital Preferred stock, $0.50 noncumulative, no par value, 10,000 shares authorized, 2,000 issued Common stock, no par value, 100,000 shares authorized, 25,930 issued $10,000 25,930 Cookie & Coffee Creations then has the following selected transactions during its first year of operations.
Dec. 1 Issues an additional 800 preferred shares to Natalie’s brother for $4,000. Apr. 30 Declares a semiannual dividend to the preferred stockholders of record on May 15, payable on June 1. June 30 Repurchases 750 shares of common stock issued to the lawyer, for $500. Recall that these were originally issued for $750. The lawyer had decided to retire and wanted to liquidate all of her assets. Oct. 31 The company has had a very successful first year of operations. It earned revenues of $462,500 and incurred operating expenses of $370,000 (including $750 legal fee, but excluding income tax). 31 Records income tax expense. (The company has a 20% income tax rate.) 31 Declares a semiannual dividend to the preferred stockholders of record on November 15, payable on December 1.
Prepare the journal entries to record the above transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter o for the amounts. Record journal entries in the order displayed in the problem statement.) Debit Credit Date Dec. 1 Account Titles and Explanation Cash 4000 Preferred Stock 4000 Apr. 304 Cash Dividends 700 Dividends Payable 700 June 1 Dividends Payable 700 Cash 700 June 30 Treasury Stock 500 Cash 500 Oct. 31 Income Tax Expense 18500 Income Taxes Payable 18500 (To record income tax expense) Oct. 31 Cash Dividends 700 Dividends Payable 700 (To record dividend declared) Prepare the statement of retained earnings for the year. (List items that increase retained earnings first. If answer is zero, please enter 0, do not leave any field blank.) COOKIE & COFFEE CREATIONS INC. Statement of Retained Earnings Balance, November 1, 2020 Add :
Net Income /(Loss) 74000 Less : Cash Dividends-Common 4 1400 Balance, October 31, 20214 72600 Prepare the stockholders’ equity section of the balance sheet as of October 31, 2021. (Enter account name only and do not provide descriptive information.) COOKIE & COFFEE CREATIONS INC. Partial Balance Sheet October 31, 2021 Stockholders’ Equity Paid-in Capital Prepare closing entries. (Use Operating Expenses and Income Tax Expense as the only expense accounts.) (Credit account titles are automatically indented when amount is entered.
Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter o for the amounts. Record journal entries in the order displayed in the problem statement.) Debit Credit Date Oct. 31 Account Titles and Explanation Sales Revenue 462500 Income Summary 462500 (To close revenue account) Oct. 31 Income Summary 388500 Operating Expenses 370000 Income Tax Expense 18500 (To close expense accounts) Oct. 31 Income Summary 74000 Retained Earnings 74000 (To close net income /(loss)) Get Accounting Homework Help Today