American Laser, Inc., reported the following account balances on January 1 $ 5,0

Question

American Laser, Inc., reported the following account balances on January 1 $ 5,000 30,000 90,000 2,000 Accounts Receivable Accumulated Depreciation Additional Paid-in Capital Allowance for Doubtful Accounts Bonds Payable Buildings Cash Common Stock, 10,000 shares of $1 par Notes Payable (long-term) Retained Earnings Treasury Stock 247,000 10,000 10,000 10,000 120,000 The company entered into the following transactions during the year Jan. Feb. Mar. Aug. Sept. Oct. Oct. 15 15 15 15 15 1 3 Issued 5,000 shares of $1 par common stock for $50,000 cash. Reacquired 3,000 shares of $1 par common stock into treasury for $33,000 cash. Reissued 2,000 shares of treasury stock for $24,000 cash. Reissued 600 shares of treasury stock for $4,600 cash. Declared (but did not yet pay) a $1 cash dividend on each outstanding share of common stock. Issued 100, 10-year, $1,000 bonds, at a quoted bond price of 101 Wrote off a $500 balance due from a customer who went bankrupt. General Journa General Ledger Requirement Trial Balance Balance Sheet Use the dropdowns to select the accounts properly included on the classified balance sheet. The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. However, you will need to enter the amount of Common stock, Additional paid-in capital, Retained earnings, and Treasury stock. At the end of the year, the adjusted net income was $20,000 Show less Unadjusted AMERICAN LASER, INC Balance Sheet (partial) At December 31 urrent Assets Cash 156,600 otal Assets 156,600 Stockholders' Equity Contributed Capital 15,000 135,000 150,000 105.400 255,400 Common Stock Additional Paid-In Captal-Common Stock Total Contributed Capital Retained Earnings Total s: Treasury Stock otal Liabilities and Stockholders' Equity S 251,000 Trial Balance Balance Sheet

Explanation / Answer

Jan 15)

Cash account debit 50,000

To common stock    50,000

( For 5000 common stock issued for cash)

Feb 15)

Treasury stock account debit    33,000

Tocash       33,000

( For 3000 treasury stock acquired for cash 33,000)

March 15

Cash account debit 24,000

To additional paid in capital 2000

to Treasury stock       22,000

( For treasury stock reissued at more than cost 12 -11 $ 1 extraper treasury stock)

Aug 15)

Cash account debit          4600

Paid in capital from treausry stock account (loss) debit    2000

To treasury stock (600*11 at cost)       6600

(For treasury stock issued at loss)

Sep 15)

Retained earnings account debit (4600*1)    4600

To dividend payable       4600

( For dividend declared but not paid, total shares outstandingis ( 5000-3000+2000+600)

Oct 1)

Cash account debit 101,000

   To bonds payable    101,000

( For 100 bonds issued at $ 1010 each)

Oct 3)

Bad debt expense 500

To accounts receivables    500

The credit entry reduces the receivable balance to 4500 as 500is expected to be recovered from the receivable. The debit entryhas the effect of cancelling the impact on profit of the sales thatwere previously recognized in the income statement.

', '

Date

Accounting Titles andExplanation

Debit

Credit

15-Jan

Cash

$50,000

Common Stock

$5,000

Addition paid in capital

$45,000

(To record issuance of common stock)

15-Feb

Treasury Stock

$33,000

Cash

$33,000

(To repurchase stock)

15-Mar

Cash

$24,000

Treasury Stock (2,000 x $11)

$22,000

Additional Paid -in Capital - Treasury Stock

$2,000

(To issue treasury stock)

15-Aug

Cash

$4,600

Additional Paid -in Capital - Treasury Stock

$2,000

Treasury Stock (600 x $11)

$6,600

(To issue treasury stock)

15-Sep

Cash Dividend

$14,600

Dividend Payable

$14,600

(To record cash dividend)

*(10,000 + 5,000 - 3,000 + 2,000 + 600) x $1

1-Oct

Cash ($101 x 1,000)

$101,000

Premium on Bonds Payable

$1,000

Bonds Payable

$100,000

(To record issue of bonds)

3-Oct

Allowance for Doubtful Accounts

$500

Accounts Receivable

$500

(To write off account receivable)

31-Dec

Retained Earnings

$14,600

Cash Dividend

$14,600

(To transfer dividend)

Date

Accounting Titles andExplanation

Debit

Credit

15-Jan

Cash

$50,000

Common Stock

$5,000

Addition paid in capital

$45,000

(To record issuance of common stock)

15-Feb

Treasury Stock

$33,000

Cash

$33,000

(To repurchase stock)

15-Mar

Cash

$24,000

Treasury Stock (2,000 x $11)

$22,000

Additional Paid -in Capital - Treasury Stock

$2,000

(To issue treasury stock)

15-Aug

Cash

$4,600

Additional Paid -in Capital - Treasury Stock

$2,000

Treasury Stock (600 x $11)

$6,600

(To issue treasury stock)

15-Sep

Cash Dividend

$14,600

Dividend Payable

$14,600

(To record cash dividend)

*(10,000 + 5,000 - 3,000 + 2,000 + 600) x $1

1-Oct

Cash ($101 x 1,000)

$101,000

Premium on Bonds Payable

$1,000

Bonds Payable

$100,000

(To record issue of bonds)

3-Oct

Allowance for Doubtful Accounts

$500

Accounts Receivable

$500

(To write off account receivable)

31-Dec

Retained Earnings

$14,600

Cash Dividend

$14,600

(To transfer dividend)

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