Case 9 1 Ana Kristiana PDF

Nama : Ana Kristiana
Kelas : 1806160863
Case 9-1 Xytech Inc.*
You are to write a journal entry for each transaction as it is described. You should be
explicit about what noncurrent liability and owners’ equity—that is, invested capital—
accounts are affected by the transactions,but effects on assets (including cash) and
current liabilities can be recorded in a single account, “A&CL.”
20X0 : The firm began as a partnership on January 10, with the three equal partners, Able,
Baker, and Cabot, each contributing $100,000 capital. The accountant set up a capital
account for each of the three partners. On April 1 the partners arranged with a bank a
$100,000, 8 percent, five-year “balloon” note, which meant that only quarterly interest was
payable for five years, with the principal due in full as a lump sum at the end of the fifth
year. The firm’s net loss for 20X0 was $54,000. A salary for each partner was included in the
calculation of net loss; no other payments were made to the partners.
A&CL 300,000
Able, Capital 100,000
Jan 10
Baker, Capital 100,000
Cabot, Capital 100,000
A&CL 100,000
Apr 1
Long-Term Debt 100,000

Baker, Capital 18,000
Dec
A&CL 56,000
20X1: To help the firm deal with a short-term liquidity problem, on April 26, Cabot liquidated
some personal securities and loaned the firm the $50,000 proceeds. Cabot expected to be
repaid these funds in no more than one year. In October Baker’s ownership interest in the
firm was sold out equally to Able and Cabot, with Baker receiving a total of $110,000 in
notes and cash from Able and Cabot. The firm had $12,000 net income for the year. Able
and Cabot planned to incorporate the firm as of January 1, 20X2. Prepare a statement of
invested capital for the partnership as of December 31, 20X1.
April 26 : No impact on invested capital because the loan is a current liability.
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October : The entity is not affected because it’s only restate owners’ equity divided into 2
equal capital accounts rather than three. ( Able $ 41,000 and Cabot $ 41,000)
A&CL 12,000
Dec Able, Capital 6,000
Statement of Invested Capital

as of December 31, 20x1

Owners’ Equity:
Owners’, Capital 258,000
Total invested capital 358,000
20X2: The firm was incorporated on January 1, as planned. The articles of incorporation
authorized 500 shares of $100 par value common stock, but only 100 shares were issued,
50 each to Able and Cabot. On March 21 the bank agreed to increase the $100,000 balloon
note to $150,000; the $50,000 proceeds were used to repay Cabot’s $50,000 loan. The net
income for the year was $26,000.

Jan 1 Common Stock, $100 par 10,000
Additional Paid-In Capital 248,000
A&CL 50,000
Mar 21
A&CL 26,000
Dec
Retained Earnings 26,000
20X3: In anticipation of a public offering of Xytech, Inc., stock, the firm effected a 1,000-for-1
stock split in November. The year’s net income was $43,000. Calculate the 20X3 basic
earnings per share amount.
November : No entry. Stock Split – 100 shares nto 100,000 shares, par value from $100 to
$0.1
A&CL 43,000
Dec
43,000 100
Basic EPS:  0,43 Par Value:  $0,10
(100 *1000 ) 1000
20X4: In January the firm went public. An investment banker sold 100,000 newly issued
shares at $7.75 per share. The banker’s fee and other issuance costs amounted to $55,000.
The year’s net income (after stock issuance costs) was $68,000. Prepare a statement of
invested capital as of December 31, 20X4.
 55,000 
Net proceeds per share: $7,75     $7,20
 100,000 
A&CL ($7,20*100,000) 720,000

Jan Common Stock, ($0,10 par*100,000) 10,000
Additional Paid-in Capital 710,000
A&CL 68,000
Dec


Owners’ Equity:
Common stock, $0,10 par 20,000
Total 1,115,000
Total invested capital 1,265,000
20X5: In January the company issued 500 20-year bonds with a face value of $1,000 each
and a coupon rate of 6 percent. Although the bonds were issued at par, because of issuance
costs the proceeds were only $950 per bond. Part of the proceeds was used to repay the
firm’s prior long-term debt. The year’s net income was $85,000.
A&CL 500,000
Jan
Bonds Payable 500,000
The company only receipt $475.000 in cash and the $25.000 is deferred charges for
issuance costs.
Long Term Debt 150,000
Jan
A&CL 150,000
A&CL 85,000
Dec
20X6: In April Able and Cabot each sold 25,000 of their common shares, receiving
proceeds of $11 per share. The company earned net income of $111,000. On December
31, the firm declared a dividend of $0.15 per share, payable January 31, 20X7, to holders of
record as of January 15. Prepare a statement of invested capital as of December 31, 19X6.
April : No impact
A&CL 111,000
Dec

Dec
A&CL ($0,15*200,000) 30,000


Owners’ Equity:
Total 1,281,000
20X7: Feeling that the market was undervaluing the company’s stock, in June the
management decided to purchase 20,000 shares on the open market. The purchase was
effected July 1 at a price of $10 per share.The shares were held as treasury stock, available
for possible reissuance. The year’s net income was $152,000. In December, a $0.20 per
share dividend was declared, payable the following month. Calculate the year’s earnings per
share.
Treasury Stock 200,000

Jul 1
A&CL ($10*20,000) 200,000
A&CL 152,000
Dec

Dec 31
A&CL ($0,20*180,000) 36,000
152,000
 $0,80
EPS: (200,000  180,000)
2
20X8: In January the company issued 4,000 shares of convertible cumulative preferred
stock with an annual dividend rate of $5 per share. Proceeds of the issuance were $200,000.
Each share was convertible upon the holder’s demand into two shares of Xytech common
stock. Net income before preferred dividends was $186,000. In December, a dividend of
$0.25 per common share was declared, payable the following month. Calculate the basic
and diluted earnings per share of common stock in 20X8.
A&CL 200,000
Jan
Preferred Stock 200,000
A&CL 186,000
Dec

Dec
A&CL 65,000
*$0.25 x 180,000 common + $5 x 4,000 preferred=65,000
186,000  ($5 * 4000 )

Basic EPS:  $0,92
180,000
186,000
Diluted EPS:  $0,99
180,000  (4,000 * 2)
20X9: Net income before preferred stock dividends was $252,000. Instead of paying a cash
dividend to common stock shareholders, on December 31, the firm declared a 5 percent
stock dividend. The market price of the common stock on December 31 was $17 per share.
No shares of preferred stock were converted during the year. Calculate the basic and diluted
earnings per share for 20X9 and prepare a statement of invested capital as of December
31. What is the company’s debt/capitalization ratio at year-end?
A&CL 252,000
Dec 31
Dec 31
A&CL 20,000

Dec 31
Common Stock 153,000
*180,000*5%*$17=153,000
252,000  20,000
Basic EPS:  $1,29
180,000
252,000
Diluted EPS:  $1,34
188,000
The diluted EPS is antidiluted


Owners’ Equity:
Preferred Cost 200,000
Less : Treasury Stock (47,000)
Total 1,750,000
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Nama : Ana Kristiana

Case 9-1 Xytech Inc.*

Able, Capital 18,000

April 26 : No impact on invested capital because the loan is a current liability.

Statement of Invested Capital

Long-Term Debt 100,000

Able, Capital 129,000

A&CL ($7,20*100,000) 720,000

Statement of Invested Capital

Long-Term Debt 150,000

Retained Earnings 30,000

Statement of Invested Capital

Bonds Payable 500,000

Treasury Stock 200,000

Retained Earnings 36,000

Retained Earnings 65,000

186,000  ($5 * 4000 )

Retained Earnings 153,000

The diluted EPS is antidiluted

Statement of Invested Capital

Bonds Payable 500,000

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