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income during 2012 was $1,811,090, and cash dividends declared and paid during 2012
totaled $76,490. Prepare a retained earnings statement for the year ended December 31,
2012. Assume an error was discovered: land costing $87,050 (net of tax) was charged to
repairs expense in 2009. (Enter all amounts as positive amounts and subtract where
necessary.)
8) On January 1, 2012, Richards Inc. had cash and common stock of $63,530. At that
date the company had no other asset, liability or equity balances. On January 2, 2012, it
purchased for cash $21,710 of equity securities that it classified as available-for-sale. It
received cash dividends of $4,940 net of tax during the year on these securities. In
addition, it has an unrealized holding gain on these securities of $6,880 net of tax.
Determine the following amounts for 2012: (a) net income; (b) comprehensive income;
(c) other comprehensive income; and (d) accumulated other comprehensive income (end
of 2012).
9) Armstrong Corporation reported the following for 2012: net sales $1,229,700; cost of
goods sold $750,700; selling and administrative expenses $335,300; and an unrealized
holding gain on available-for-sale securities $17,400.
10) Prepare a statement of comprehensive income, using the two-income statement
format. Ignore income taxes and earnings per share. (Enter all amounts as positive
amounts and subtract where necessary.)
11) Guillen, Inc. began work on a $7,088,400 contract in 2012 to construct an office
building. Guillen uses the completed-contract method. At December 31, 2012, the
balances in certain accounts were construction in process $1,752,600; accounts
receivable $252,600; and billings on construction in process $1,108,600. Indicate how
these accounts would be reported in Guillens December 31, 2012, balance sheet.
12) Lazaro, Inc. sells goods on the installment basis and uses the installment-sales
method. Due to a customer default, Lazaro repossessed merchandise that was originally
sold for $890, resulting in a gross profit rate of 40%. At the time of repossession, the
uncollected balance is $710, and the fair value of the repossessed merchandise is $281.
Prepare Lazaros entry to record the repossession. (List multiple debit/credit entries
from largest to smallest amount, e.g. 10, 5, 2.)
13) Harding Corporation has the following accounts included in its December 31, 2012,
trial balance: Accounts Receivable $118,190; Inventories $297,600; Allowance for
Doubtful Accounts $9,260; Patents $75,110; Prepaid Insurance $9,630; Accounts
Payable $85,580; Cash $27,010. Prepare the current assets section of the balance sheet
listing the accounts in proper sequence.
14) Patrick Corporations adjusted trial balance contained the following asset accounts
at December 31, 2012: Prepaid Rent $21,860; Goodwill $55,710; Franchise Fees
Receivable $4,820; Franchises $40,540; Patents $34,850; Trademarks $13,780. Prepare
the intangible assets section of the balance sheet. (List amounts from largest to smallest,
e.g. 10, 5, 3, 2.)
15) Hawthorn Corporations adjusted trial balance contained the following accounts at
December 31, 2012: Retained Earnings $123,010; Common Stock $707,490; Bonds
Payable $109,630; Additional Paid-in Capital $209,230; Goodwill $64,340; Accumulated
Other Comprehensive Loss $151,180. Prepare the stockholders equity section of the
balance sheet. (List entries in order of stock preferred status. For negative numbers use
either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45).)
16) Keyser Beverage Company reported the following items in the most recent year.
Net income $40,910
Dividends paid 5,060
Increase in accounts receivable 11,930