Syed Abbas Hassan

48677

ASSIGNMENT

PREPARTING INCOME STATEMENT, STATEMENT OF RETAINED EARNINGS, RECORDING DIVIDEND:

CASH AND STOCK

Question 1:

ANS 1:

CLICK PHOTOGRAPOHIC SUPPLIES INC

INCOME STATEMENT

YEAR ENDED DECEMBER 31 , 2012

Sales revenue-- -480000

Cost of goods sold--- 205000

Gross profit-- -275000

Operating expenses-- 130000

Income from continuing operations----------------------------------------145000

Loss on discontinued operations $35000

Less income tax saving of $14000-----------------------------------------(21000)

Income before extraordinary item-------------------------------------------124000

Extraordinary loss 20000, less

Income tax saving of $ 8000--- (12000)

Net income - - 112000

- -

Question 2:

ANS 2:

ANNIE MAY BAKERY, INC

STATEMENT OF RETAINED

EARNING YEAR ENDED DECEMBER

31, 2012

Retained Earnings, December 31, 2011 as originally reported--------------------------$47000

Prior period adjustment –to be correct--------------------------------------------------------(10000)

Retained Earnings December 31 2011 as adjusted------------------------------------------$37000

Net income for 2012--- $71000

$108000

Dividends for 2012 -- (29000)

- -

Retained Earnings, December 31, 2012----------------------------------------------------------$79000

QUESTION 3 & QUESTION 4:
ANSWER 3 :

Requirement 1:

DATE DETAILS DR CR

DEC 31 Retained earnings (530x11x10%) 583

Stock div to be distribute(530x10%)
2011 53
Additional paid in cap stock divide
530
(declare a 10% stock dividend
consisting of 530 shares of 11par)
April 30 53
Stock dividend to be distributed
2012 53
Common stock

( distributed stock dividend 530

shares of 10%)
Requirement 2:

PONDSIDE OCCUPATIONAL THERAPY, INC

BALANCE SHEET

APRIL 30 , 2012

Paid-In Capital:

Common Stock—$1 Par Value; 1,250 shares authorized,

583 shares issued and outstanding---------------------------------------------$ 583

Paid-In Capital in Excess of Par—Common------------------------------------2,650

Total Paid-In Capital- 3,233

Retained Earnings- -120,417

Total Stockholders' Equity-- $ 123,650

-
ANSWER 4:

REQUIREMENT 1:

DATE DETAILS DR CR

Retained earnings (77000x5x10%) 38500

Stock div to be distributed (77000x10%) 7700

Additional paid in capital 30800

(Declare a 10% stock dividend)

Stock dividend to be distributed 7700

Common stock 7700

(distributed stock dividend of 77000 of

10%)

Requirement 2:

DATE DETAILS DR CR

Dividend 21,175

Dividend payable 21,175

(declare a cash dividend)

Dividend payable 21,175

Cash 21,175

(payment of cash dividend)