GRADED PROJECT WITH CALCULATIONS

Assignment Details:  This assignment will include the three-part graded project described below. Corporations and Bonds Payable and the next lesson Investments and Cash Flow. The combined project and exam portions of this Assignment total 100 points.
You should complete your work for this project at this time and submit it. (available at the Assignments tool) after your next lesson.

Part A (5 points each for a possible total of 10 points)
1.  After several years of business, Abel, Barney, and Cole are liquidating. The following are post-closing account balances.
Cash      18,000  Inventory     73,000  Other assets   157,000  Accounts Payable    61,000   Abel, Capital    50,000   Barney, Capital   50,000   Cole, Capital   87,000
Noncash assets are sold for $275,000. Profits and losses are shared equally.
After all liabilities are paid, divide the remaining cash amongst the partners.
76 PRINCIPLES OF ACCOUNTING 2
2.  The partnership of Brandon and Ryan is being liquidated. All gains and losses are shared in a 3:1 ratio, respectively. Before liquidation, their balance sheet balances are as follows:
Cash $10,000  Other Assets 8,000  Liabilities 4,000  Brandon, Capital  7,000  Ryan, Capital 7,000
a. I f the Other Assets are sold for $10,000, how much will each partner receive before paying liabilities and distributing the remaining assets?
b. I f the Other Assets are sold for $8,000, how much will each partner receive before paying liabilities and distributing remaining assets?
Part B (10 points each for a possible total of 20 points)
1.  Simon Brothers pays $47,000 into a bond sinking fund each year to redeem the future maturity of its bonds. During the first year, the fund earned $3,825. At the time of bond redemption, the fund has a balance of $417,000. Of this, $400,000 was used to redeem the bonds. Journalize the following entries.
a. Initial deposit
b. The first year’s interest
c. The redemption of the bonds
2.  On January 1, Auctions Online issued $300,000, 9%, 10-year bonds to lenders at the contract rate. Interest is to be paid semiannually on July 1 and January 1. Journalize the following entries.
a. Issued the bonds
b. Paid first semiannual interest payment
c. Retired the bonds at maturity
PRINCIPLES OF ACCOUNTING 2 77
Part C (10 points each for a possible total of 20 points)
1.  Prepare a statement of retained earnings in proper form for White Corporation for the year ended December 31, 2012, from the following:
Retained Earnings, January 1, 2012 $2,000
Dividends paid during the year 800
Net income for the year 3,000
Correction of prior year error. Purchase   of land recorded as rent expense 1,000
2. Curtis Corporation’s balance sheet included the following:
Common Stock, $5 par value, 5,000 shares issued   and outstanding $25,000
Retained Earnings 20,000
Total Stockholders’ Equity $45,000
Prepare journal entries for the following transactions.
May    3 Issued 500 shares at $6 per share
9 Reacquired 100 shares at $4 per share
15 Reissued 50 of the Treasury shares at $7 per share
17 Reissued 10 of the Treasury shares at $3 per share