QUESTION 30 Tom Company (which uses a perpetual inventory system) has the follow

Question

QUESTION 30 Tom Company (which uses a perpetual inventory system) has the following account balances after adjusting entries at December 3 Cash Merchandise Inventory (12/31/2012) Equipment Accounts Receivable Common Stock ($.50 par) Sales Rent Expense Bonds Payable (due 2040) Accounts Payable $227,000 100,000 120,000 105,000 350,000 880,000 67,000 120,000 27,000 10,000 47,000 85,000 Dividends Treasury Stock, Common (19,000 shares) Preferred Stock 696 ($10 par) Land Paid-in Capital in Excess of Par Value, Preferred Cost of Goods Sold Interest Expense 260,000 8,000 720,000 20,000 Click Save and Submit to save and submit. Cick Save All Answers to save all answers

Explanation / Answer

Answer to Question 1:

Net Income (loss) = Sales - Cost of Goods Sold - Operating Expenses - Rent Expense - Interest Expense
Net Income (loss) = $880,000 - $720,000 - $95,000 - $67,000 - $20,000
Net Income (loss) = -$22,000

Answer to Question 2:

Total Paid-in Capital = Common Stock + Preferred Stock 6% + Paid-in Capital in Excess of Par Value, Common + Paid-in Capital in Excess of Par Value, Preferred + Paid-in Capital from Treasury Stock Transactions, Common
Total Paid-in Capital = $350,000 + $85,000 + $117,000 + $8,000 + $56,000
Total Paid-in Capital = $616,000

Answer to Question 3:

Net Realizable Value of Accounts Receivable = Accounts Receivable - Allowance for Doubtful Accounts
Net Realizable Value of Accounts Receivable = $105,000 - $5,000
Net Realizable Value of Accounts Receivable = $100,000

Answer to Question 4:

Number of common stock outstanding = Common Stock / Par Value
Number of common stock outstanding = $350,000 / $0.50
Number of common stock outstanding = 700,000

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