ACC 313/314 FINANCING CYCLE

PROBLEM 1 Analysis of Stock Transaction

1 Computation of Number of Shares
2004 2005 2006 2007 2008
Common Stocks 2,000.00 2,000.00 2,040.00 3,040.00 4,560.00
40.00 1,000.00 1,520.00 4,560.00
400.00
2,000.00 2,040.00 3,040.00 4,560.00 9,520.00

Preferred Stocks 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00

-200.00
1,000.00 1,000.00 1,000.00 1,000.00 800.00

2 Cash Dividends
2004 2005 2006 2007 2008
Jun-30 7,980.00 11,400.00
Dec-31 6,697.60 12,540.00 11,900.00
0 0 6,697.60 20,520.00 23,300.00

PROBLEM 3
 PROBLEM 2 Auditing Shareholder's Equity

JOURNAL ENTRIES

Jan-15 Cash (650*40) 26,000

Paid in Capital 13,000
Treasury Share (650*60) 39,000

Feb-02 Cash (90,000*103) 92,700

Discount on bonds payable 2,700
Bonds payable 90,000
Ordinary share warrants (90*60) 5,400

Mar-06 Cash 24,640

Ordinary share subscription receivable 36,960
Ordinary share subscribed 2,800
Paid in capital excess of par 58,800

Mar-20 Cash 31,680

Ordinary share subscription receivable 31,680

Mar-20 Ordinary share subscribe 2,400

Ordinary Share 2,400

Mar-20 Ordinary share subscribe 400

Paid in Capital in excess of par 8,400
Ordinary share subscription receivable 5,280
Paid in capital forfeited share subscription 3,520

Nov-01 Cash 22,000

Ordinary share warrants 3,300
Ordinary Share 1,100
Paid in capital in excess of par 24,200

PROBLEM 4
a. Securities available for sale 189,400
Interest revenue (50,000*12%*4/12) 2,000
Investment 191,400

Feb-01 37,400
Apr-01 100,000
Jul-01 52,000
189,400
b. Interest Receivable 7,750
Securities Available for Sale 51
 7,699
Accrued Interest = 50,000*12%*10/12 5,000
Premium Ammotization = 2,000*6/236 51
Accrued Interest = 100,000*11%*3/12 2,750

COST FAIR VALUE UNREALIZED GAIN

Blossom Company Shares 37,400 33,800 -3,600
Government bonds 100,000 124,700 24,700
Buttercup Company bonds 52,000 58,600 6,600
TOTAL 189,400 217,100 27,700