On January 1, 2018, the general ledger of Grand Finale Fireworks includes the fo
ID: 2483330 • Letter: O
Question
On January 1, 2018, the general ledger of Grand Finale Fireworks includes the following account balances:
Accounts Debit Credit
Cash $ 43,200
Accounts Receivable 45,500
Supplies 8,000
Equipment 69,000
Accumulated Depreciation $ 9,500
Accounts Payable 15,100
Common Stock, $1 par value 15,000
Additional Paid-in Capital 85,000
Retained Earnings 41,100
Totals $ 165,700 $ 165,700
During January 2018, the following transactions occur:
January 2 Issue an additional 2,000 shares of $1 par value common stock for $40,000.
January 9 Provide services to customers on account, $15,600.
January 10 Purchase additional supplies on account, $5,400.
January 12 Repurchase 1,200 shares of treasury stock for $17 per share.
January 15 Pay cash on accounts payable, $17,000.
January 21 Provide services to customers for cash, $49,600.
January 22 Receive cash on accounts receivable, $17,100.
January 29 Declare a cash dividend of $0.30 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hint: Grand Finale Fireworks had 15,000 shares outstanding on January 1, 2018 and dividends are not paid on treasury stock.)
January 30 Reissue 800 shares of treasury stock for $19 per share.
January 31 Pay cash for salaries during January, $42,500.
-RECORD CLOSING ENTRIES
Explanation / Answer
Grand Finale fireworks Accounting entries Date Account Title Dr $ Cr $ Jan 2.2018 Cash 40,000 Common Stock 2,000 Additional Paid in Capital 38,000 Jan 9. 2018. Service Revenue 15,600 Accounts Receivable 15,600 Jan 10.2018 Supplies 5,400 Accounts Payable 5,400 Jan 12.2018. Treasury Stock 20,400 Cash 20,400 ( treasury stock purchase recorded at cost) Jan 15.2018. Cash 17,000 Accounts Payable 17,000 Jan 21.2018. Service Revenue 49,600 Cash 49,600 Jan 22.2018. Cash 17,100 Accounts Receivable 17,100 Jan 29.2018. Dividend Payable 4,740 Retained Earning 4,740 ( Recording dividend declared) Jan 30.2018. Treasury Stock 13,600 Cash 15,200 Additional Paid In Capital from Treasury Stock 1,600 ( treasury stock reissue , credited treasury stock at cost, balance to paid in capital) Jan 312.018. Salary Expense 42,500 Cash 42,500