It is not appropriate of you to assign your homework to others. To get help you should do the work as well as you can and provide your solution so someone can help you by pointing out where you are wrong and by explaining areas where you show weaknesses.
Journalizing transactions is a simple matter of deciding what took place in an exchange. You record what you received and you record what you gave up. It makes no sense to try to memorize journal entries. The idea is to analyze what was exchanged. You received or
gave up assets and you use the debit and credit rules to record that. You incurred a liability (gave a promise to pay later) or you got your promise back because you discharged the liability. Again a credit or debit. Similarly with capital. You issued stock for cash so you received cash (a debit) and record a credit in owners’ equity representing the owner’s interest in the business assets. Or bought back stock giving up cash (a credit) and reducing the owner’s interest in the business (a debit in a capital account). You increase capital (credit revenue) by providing a service or product. You decreases capital (debit an expense) by using up assets or services. As long as you understand what was exchanged, you can decide what to debit and credit.
When Treasury stock is sold for more than cost, you don't record a profit because you can't profit by transactions with the owners. Instead the excess is credited to additional paid-in capital. Stock splits require only a memorandum and the par value of the stock is cut in half
For part B, post your journal entries in T-accounts where you first enter the beginning balances. Then post the additional information in part B, find the balances of the accounts, and use them to prepare financial statements.
You should be able to solve this problem in 45-60 minutes. It is simply asking too much to expect someone else to do this work for you.
On January 1, 2014, Flip Corp had 560,000 shares of $1 par value common stock issued and outstanding.
There was a $3,000,000 balance in the Retained Earnings account at the beginning of the year. During the first quarter of the year, the following occurred:
Jan. 8 Issued 40,000 shares of its own common stock for $400,000.
Jan. 18 Declared a cash dividend of $1 per share to stockholders of record on Jan. 10.
Jan. 31 Paid the $1 cash dividend declared on Jan. 18.
Feb. 2 Purchased 3,000 shares of its own common stock for the treasury at $11 per share. Feb. 14 Sold 2,000 shares of the treasury stock purchased on Feb. 2 for $12 per share.
March 25 Declared a 2 for 1 stock split on outstanding shares.
Instructions Prepare journal entries to record the above transactions.
Part B. The following information is available for Flip Corp for the year ended December 31, 2014: Beginning retained earnings $340,000, Cost of goods sold 620,000, Declared cash dividends 50,000, Operating expenses 170,000, Other expenses and losses 40,000, Other revenues and gains 60,000, Sales 1,000,000, Tax rate 30% 1. Prepare a corporate income statement in good form. 2. Prepare a retained earnings statement for the year.
