Accounts Debit Credit Cash $ 42,700 Accounts Receivable 44,500 Supplies 7,500 Eq
ID: 2770064 • Letter: A
Question
Accounts
Debit
Credit
Cash
$ 42,700
Accounts Receivable
44,500
Supplies
7,500
Equipment
64,000
Accumulated Depreciation
$ 9,000
Accounts Payable
14,600
Common Stock, $1 par value
10,000
Additional Paid-in Capital
80,000
Retained Earnings
45,100
Totals
$158,700
$158,700
During January 2018, the following transactions occur:
January 2
Issue an additional 2,000 shares of $1 par value common stock for $40,000.
January 9
Provide services to customers on account, $14,300.
January 10
Purchase additional supplies on account, $4,900.
January 12
Repurchase 1,000 shares of treasury stock for $18 per share.
January 15
Pay cash on accounts payable, $16,500.
January 21
Provide services to customers for cash, $49,100.
January 22
Receive cash on accounts receivable, $16,600.
January 29
Declare a cash dividend of $0.30 per share to all shares outstanding on January 29. The dividend is payable on February 15.
(Hint: Grand Finale Fireworks had 10,000 shares outstanding on January 1, 2018 and dividends are not paid on treasury stock.)
January 30
Reissue 600 shares of treasury stock for $20 per share.
January 31
Pay cash for salaries during January, $42,000.
Accounts
Debit
Credit
Cash
$ 42,700
Accounts Receivable
44,500
Supplies
7,500
Equipment
64,000
Accumulated Depreciation
$ 9,000
Accounts Payable
14,600
Common Stock, $1 par value
10,000
Additional Paid-in Capital
80,000
Retained Earnings
45,100
Totals
$158,700
$158,700
Enter your answer as a whole number (ie. 5% should be entered as 5, not .05). 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? he return on equity is Is the company more or less profitable than other companies? (b) How many shares of common stock are outstanding as of January 31, 2018? The number of common shares outstanding as of January 31, 2018 is (c) Calculate earnings per share for the month of January. (Hint: To calculate average shares of common stock outstanding take the beginning shares outstanding plus the ending shares outstanding and divide the total by 2.) If earnings per share was $3.60 last year (i.e., an average of S0.30 per month), is earnings per share for January 2018 better or worse than last year's average? Earnings per share is Is earnings per share for January 2018 better or worse than last year's average?Explanation / Answer
Calculate the return on equity for the month of January. If the average return on equity for January is 2.5%. is the company more or less profitable than other companies in the same industry?
Return on Equity = Net Income / Average Shareholder Equity= $16500 / $62,000 = 2.66%
Company is more profitable then other companies
(b) How Many Shares of Common Stock are outstanding as of January 31,2018?
Total 3600 Shares outstanding
(C) Calculate Earnings per share for the months of January. If earnings per share was $3.60 last year, is earnings per share for January 2018 better or worse than last years's average?
Earning per Share = Net Income - Preferred Dividends / Weighted Average of Commone Shares outstanding
EPS = $16,500 - 0 / (1000 + 3600)/2 = $7.17
In January 2018 has better EPS $7.17 in comparission with last year EPS of $3.60
Opening Bal 1000 Shars@10 $10,000 Jan-02 2000 shares @20 $40,000 Jan-30 600 Share @20 $12,000 Total 3600 Shares $62,000Related Questions
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