(Worksheet Analysis of Selected Transactions) The transactions below took place during the year 2012.
1. Convertible bonds payable with a par value of $300,000 were exchanged for unissued common stock with a par value of $300,000. The market price of both types of securities was par.
2. The net income for the year was $360,000.
3. Depreciation expense for the building was $90,000.
4. Some old office equipment was traded in on the purchase of some newer office equipment and the following entry was made. (The exchange has commercial substance.)
|
Equipment |
45,000 |
|
Accum. Depreciation—Equipment |
30,000 |
|
Equipment |
40,000 |
|
Cash |
34,000 |
|
Gain on Disposal of Plant Assets |
1,000 |
The Gain on Disposal of Plant Assets was credited to current operations as ordinary income.
5. Dividends in the amount of $123,000 were declared. They are payable in January of next year.
Instructions
Show by journal entries the adjustments that would be made on a worksheet for a statement of cash flows.