1) Patrick Corporation is authorized to issue 1,000,000 shares of $1 par value common stock. During 2010, the company has the following stock transactions.
Jan. 15 Issued 500,000 shares of stock at $7 per share.
Sept. 5 Purchased 20,000 shares of common stock for the treasury at $8 per share.
Dec. 6 Declared a $0.50 per share dividend to stockholders of record on December 20, payable January 3, 2011.
Instructions
Journalize the transactions for Patrick Corporation.
2) Harrell Company reported net income of $320,000 for the current year. Depreciation recorded on buildings and equipment amounted to $75,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:
End of Year Beginning of Year
Cash $22,000 $15,000
Accounts receivable 17,000 32,000
Inventories 55,000 65,000
Prepaid expenses 7,500 5,000
Accounts payable 14,000 18,000
Income taxes payable 600 1,200
Prepare the cash flows from the operating activities section of the statement of cash flows using the indirect method.
3) Indicate whether each of the following expenditures should be classified as: land, land improvements, buildings, equipment, or none of these.
Parking lots
Electricity used by a machine
Excavation costs
Interest on building construction loan
Cost of trial runs for machinery
Drainage costs
Cost to install a machine
Fences
Unpaid (past) property taxes assumed
Cost of tearing down a building when land and a building on it are purchased
4) Kw Company reports the following information (in millions) during a recent year: net sales, $12,408.5; net earnings, $294.9; total assets, ending, $4,312.6; and total assets, beginning, $4,254.3.
a) Calculate the: return on assets (to one decimal place)
b) Calculate the: profit margin ratios (to one decimal place)
c) Calculate the: profit margin ratios (to one decimal place)