B&L Landscapes, Inc. Mini Practice Part 2 B Graham and Larry Miler incorporated
ID: 2341876 • Letter: B
Question
B&L Landscapes, Inc. Mini Practice Part 2 B Graham and Larry Miler incorporated B&L Landscapes, Inc. on July 1.2017. The business consists of lawn care and sprinkler system installations. In addition, they also sell two types of fertilizer Bill and Lary are concerned about ensuring a steady supply of high-quality PVC pipe for the sprinkler installations jobs they do and have come up with a plan to issue bonds to several of their family members. These funds will enable them to acquire a significant portion of the stock of a local PVC manufacturer. At the end of July 2017. the company has the following adjusted trial balance: B&L Landscapes, Inc. Adjusted Trial Balance July 31, 2017 Cash 65.000 Allowance for Doubtful Accounts Inventory 59,000 Building 25.000 42.500 Equipment Accumulated Depreciation - Equipment Accounts Payable Notes Payoble Prelered Stock Common Stock Retained Earnings Total 22,950 8.000 92.700 Not included in the adjusted trial balance are the following transactions that occur on July 31, 2017 l. B&L Landscapes. Inc. issued S55.000 worth of 5%, 10 year bonds at face value. 2. B&L Landscapes, Inc. purchased 30% of the outstanding common stock of Crestline Pipe. Inc. for $75,000Explanation / Answer
Part-1:
General Journal
Date
Account Titles and Explanation
Debit
Credit
July. 31, 2017
Cash
$ 55,000.00
Bonds Payable
$ 55,000.00
(Being bonds issued for Cash)
July. 31, 2017
Investment in Crestline Pipe Inc.
$ 75,000.00
Cash
$ 75,000.00
(Being investment made in 30% Common Stock of Crestline Pipe Inc.)
Part-2:
General Ledgers
Cash
Debit
Credit
Beg. Bal.
$ 65,000.00
July. 31
$ 75,000.00
July. 31
$ 55,000.00
End. Bal.
$ 45,000.00
Investment in Crestline Pipe Inc.
Debit
Credit
Beg. Bal.
$ -
July. 31
$ 75,000.00
End. Bal.
$ 75,000.00
Bonds Payable
Debit
Credit
Beg. Bal.
$ -
July. 31
$ 55,000.00
End. Bal.
$ 55,000.00
Part-3:
B&L Landscape Inc.
Classified Balance Sheet
As on July 31, 2017
ASSETS
Current Assets:
Cash
$ 45,000.00
Accounts Receivable
$ 9,800.00
Less: Allowance for Doubtful accounts
$ (500.00)
$ 9,300.00
Prepaid Insurance
$ 1,700.00
Inventory
$ 59,000.00
Total Current Assets
$ 115,000.00
Non Currrent Assets:
Land
$ 8,000.00
Building
$ 25,000.00
Less: Accumulated Depreciation- Building
$ (1,350.00)
$ 23,650.00
Equipment
$ 42,500.00
Less: Accumulated Depreciation- Equipment
$ (7,500.00)
$ 35,000.00
$ 58,650.00
Investment in Crestline Pipe Inc.
$ 75,000.00
TOTAL ASSETS
$ 256,650.00
LIABILITIES AND EQUITY
LIABILITIES
Current Liabilities:
Accounts Payable
$ 22,950.00
Notes Payable
$ 45,000.00
Total Current Liabilities
$ 67,950.00
Long Term Liabilities:
Bonds Payable
$ 55,000.00
EQUITY:
Preferred Stock
$ 8,000.00
Common Stock
$ 33,000.00
Retained Earnings
$ 92,700.00
$ 133,700.00
TOTAL LIABILITIES AND EQUITY
$ 256,650.00
Part-4:
General Journal
Date
Account Titles and Explanation
Debit
Credit
Dec. 15, 2017
Cash
$ 1,500.00
Dividend Income
$ 1,500.00
(Being dividend received in common stock of Crestline Pipe Inc 5000*30% =$1500)
Part-1:
General Journal
Date
Account Titles and Explanation
Debit
Credit
July. 31, 2017
Cash
$ 55,000.00
Bonds Payable
$ 55,000.00
(Being bonds issued for Cash)
July. 31, 2017
Investment in Crestline Pipe Inc.
$ 75,000.00
Cash
$ 75,000.00
(Being investment made in 30% Common Stock of Crestline Pipe Inc.)
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