Bus 120.3706 Financial AccountingSpring 2023 Extra Credit Packet
Due Date – Friday June 2, 2023 or earlier, no late submissions accepted.
Please complete the packet and upload into Canvas as a pdf or Word document. You
may add additional work papers as support for your work.
There are 3 problems in this packet based on Chapters 10, 11, 12.
Please save your filename as your initials extra credit.
Name _______________________________
Date ________________________________
Problem #1 Paulson Company issues 6%, four-year bonds on January 1 of this year, with a par value of
$200,000 and semiannual interest payments. Use the following bond amortization table to
prepare journal entries for the following:
Semiannual period end
Unamortized discount
Amortization = $1,683 per period
January 1, issuance
$13,466
June 30, first payment
11,782
December 31, second payment
10,098
Carrying Value
$186,534
188,217
189,900
(a) The issuance of bonds on January 1.
Date
General Journal
Debit
Credit
Debit
Credit
Debit
Credit
(b) The first interest payment on June 30.
Date
General Journal
(c) The second interest payment on December 31.
Date
General Journal
Problem #2 York’s outstanding stock consists of 80,000 shares of noncumulative 7.5% preferred stock with a $5
par value and also 200,000 shares of common stock with a $1 par value. During its first four years of operation,
the corporation declared and paid the following total cash dividends:
Year 1
Year 2
Year 3
Year 4
$20,000
28,000
200,000
350,000
Determine the amount of dividends paid each year to each of the two classes of stockholders: preferred and
common. Also compute the total dividends paid to each class for the four years combined.
Par Value
per Preferred
Share
Annual Preferred Dividend:
Year 1
Year 2
Year 3
Year 4
Total
Dividend
Rate
Dividend per
Preferred Share
Number of
Preferred
Shares
Preferred
Dividend
$5.00
7.5%
$0.375
80,000
$30,000
Total Cash
Dividends
Paid
Paid to
Preferred
Paid to Common
Dividends in
Arrears
Problem #3
Income Statement
Sales
Cost of goods sold
Salaries expense
Depreciation expense
Net income
$160,000
$100,000
24,000
12,000
$24,000
Selected Year-End Balance Sheet Data
Accounts receivable
Inventory
Salaries payable
$10,000
16,000
1,000
Increase
Decrease
Increase
Hampton Company
Statement of Cash Flows (partial) – Indirect Method
For the year ended December 31, 20X1
Cash flows from operating activities
Net income
Adjustments to reconcile net income to operating cash flow:
Depreciation expense
Increase in Accounts receivable
Decrease in Inventory
Increase in Salaries payable
Net cash provided by operating activities
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