On January 1, 2018, the general ledger of Grand Finale Fireworks includes the following account balances:
AccountsCashAccounts ReceivableSuppliesEquipmentAccumulated DepreciationAccounts PayableCommon Stock, $1 par valueAdditional Paid-in CapitalRetained EarningsTotalsDebit$42,70044,5007,50064,000 _____$158,700Credit $9,00014,60010,00080,00045,100$158,700
During January 2018, the following transactions occur:
January 2January 9January 10January 12January 15January 21January 22January 29January 30January 31Issue an additional 2,000 shares of $1 par value common stock for $40,000 .Provide services to customers on account, $14,300 .Purchase additional supplies on account, $4,900 .Repurchase 1,000 shares of treasury stock for $18 per share.Pay cash on accounts payable, $16,500 .Provide services to customers for cash, $49,100 .Receive cash on accounts receivable, $16,600.Declare a cash dividend of $0.30 per share to all shares outstanding on January 29. The dividend is payable on February 15.Reissue 600 shares of treasury stock for $20 per share.Pay cash for salaries during January, $42,000 .
- Record each of the transactions listed above. 2. Record adjusting entries on January 31. a. Unpaid utilities for the month of January are $6,200. b. Supplies at the end of January total$5,100. c. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $10,000. d. Accrued income taxes at the end of January are$2,000. 3. Prepare an adjusted trial balance as of January 31, 2018, after updating beginning balances (above) for transactions during January (Requirement 1) and adjusting entries at the end of January (Requirement 2). 4. Prepare a multiple-step income statement for the period ended January 31, 2018. 5. Prepare a classified balance sheet as of January 31, 2018. 6. Record closing entries. 7. Analyze the following for Grand Finale Fireworks: a. Calculate the return on equity for the month of January. If the average return on equity for the industry for January is 2.5%, is the company more or less profitable than other companies in the same industry? b. How many shares of common stock are outstanding as of January 31, 2018? c. Calculate earnings per share for the month of January.