Question Detail:
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In recent years, Sonya Transportation purchased three used buses. Because of frequent turnover in the accounting department, a different accountant selected the depreciation method for each bus, and various methods were selected. Information concerning the buses is summarized below.
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Bus
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Acquired
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Cost
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Salvage
Value
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Useful Life
in Years
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Depreciation
Method
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1
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1/1/10
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$ 102,200
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$ 6,600
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4
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Straight-line
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2
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1/1/10
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194,000
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12,100
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5
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Declining-balance
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3
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1/1/11
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71,018
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8,900
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5
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Units-of-activity
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For the declining-balance method, the company uses the double-declining rate. For the units-of activity method, total miles are expected to be121,800. Actual miles of use in the first 3 years were: 2011,26,900; 2012, 32,600 ; and 2013, 31,800 .
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Calculate depreciation expense per mile under units-of-activity method. (Round answer to 2 decimal places, e.g. $0.50.)
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Depreciation expense per mile
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$
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per mile
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Alexia Corporation was organized on January 1, 2012. It is authorized to issue10,600shares of 8%, $101par value preferred stock, and493,100shares of no-par common stock with a stated value of $2per share. The following stock transactions were completed during the first year.
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Jan. 10
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Issued81,600shares of common stock for cash at $4per share.
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Mar. 1
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Issued4,000shares of preferred stock for cash at $108per share.
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Apr. 1
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Issued22,500shares of common stock for land. The asking price of the land was $90,500. The fair value of the land was $84,600.
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May 1
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Issued82,700shares of common stock for cash at $6.97per share.
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Aug. 1
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Issued11,600shares of common stock to attorneys in payment of their bill of $44,400for services provided in helping the company organize.
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Sept. 1
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Issued10,700shares of common stock for cash at $8per share.
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Nov. 1
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Issued2,520shares of preferred stock for cash at $110per share.
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Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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Date
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Account Titles and Explanation
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Debit
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Credit
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Jan. 10
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Mar. 1
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Apr. 1
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May 1
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Aug. 1
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Sept. 1
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Nov. 1
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Brandon Corporation had the following stockholders’ equity accounts on January 1, 2012: Common Stock ($5par) $512,850, Paid-in Capital in Excess of Par-Common Stock $202,320, and Retained Earnings $105,060. In 2012, the company had the following treasury stock transactions.
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Mar. 1
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Purchased5,570shares at $9per share.
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June 1
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Sold1,480shares at $13per share.
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Sept. 1
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Sold1,380shares at $10per share.
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Dec. 1
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Sold1,270shares at $6per share.
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Brandon Corporation uses the cost method of accounting for treasury stock. In 2012, the company reported net income of $30,840.
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Journalize the treasury stock transactions, and prepare the closing entry at December 31, 2012, for net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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Date
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Account Titles and Explanation
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Debit
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Credit
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Mar. 1
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June 1
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Sept. 1
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Dec. 1
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Dec. 31
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The following stockholders’ equity accounts arranged alphabetically are in the ledger of Desiree Corporation at December 31, 2012.
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Common Stock ($7stated value)
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$2,818,900
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Paid-in Capital from Treasury Stock
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11,000
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Paid-in Capital in Excess of Stated Value—Common Stock
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1,619,900
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Paid-in Capital in Excess of Par—Preferred Stock
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661,100
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Preferred Stock (8%, $50par, noncumulative)
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790,000
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Retained Earnings
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1,748,400
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Treasury Stock (10,800common shares)
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140,400
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Prepare a stockholders’ equity section at December 31, 2012. (For preferred stock, common stock and treasury stock enter the account name only and do not provide the descriptive information provided in the question.)
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DESIREE CORPORATION
Balance Sheet (Partial)
December 31, 2012
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Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Paid-in Capital Property, Plant and Equipment Revenues Stockholders’ Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity
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Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Paid-in Capital Property, Plant and Equipment Revenues Stockholders’ Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity
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Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Paid-in Capital Property, Plant and Equipment Revenues Stockholders’ Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity
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$
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Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Paid-in Capital Property, Plant and Equipment Revenues Stockholders’ Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity
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Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Paid-in Capital Property, Plant and Equipment Revenues Stockholders’ Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity
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$
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Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Paid-in Capital Property, Plant and Equipment Revenues Stockholders’ Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity
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Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Paid-in Capital Property, Plant and Equipment Revenues Stockholders’ Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity
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Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Paid-in Capital Property, Plant and Equipment Revenues Stockholders’ Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity
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Add Less :
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Additional Paid-in Capital Capital Stock Current Assets Current Liabilities Expenses Intangible Assets Long-term Investments Long-term Liabilities Net Income / (Loss) Paid-in Capital Property, Plant and Equipment Revenues Stockholders’ Equity Total Additional Paid-in Capital Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Expenses Total Intangible Assets Total Liabilities Total Liabilities and Stockholders’ Equity Total Long-term Investments Total Long-term Liabilities Total Paid-in Capital Total Paid-in Capital and Retained Earnings Total Property, Plant and Equipment Total Revenues Total Stockholders’ Equity
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$
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The following account balances relate to the stockholders’ equity accounts of Chipo Corp. at year-end.
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2012
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2011
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Common stock, 10,500 and 10,000 shares,
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respectively, for 2012 and 2011
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$161,440
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$136,600
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Preferred stock, 5,000 shares
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104,400
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104,400
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Retained earnings
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304,900
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263,980
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A small stock dividend was declared and issued in 2012. The market value of the shares was $10,920. Cash dividends were $14,380in both 2012 and 2011. The common stock has no par or stated value.
(a) What was the amount of net income reported by Chipo Corp. in 2012?
(b) Determine the amounts of any cash inflows or outflows related to the common stock and dividend accounts in 2012. Indicate where each of the cash inflows or outflows identified in would be classified on the statement of cash flows.
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Common stock
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$
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Inflow Outflow
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Financing Investing Operating
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Dividends
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$
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Inflow Outflow
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Investing Financing Operating
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