Dr #3 #1 Howell, Capital Parks, Capital Tyler, Capital 275,000 125,000

Cr

400,000

The extra 75k paid to Howell and the extra $25k paid to Parks is not recorded on the books #2 Howell, Capital Parks, Capital Tyler investment Total Tyler Interest 1/3rd Paid Amt to be distributed Howell distribution 60% Parks distribution 40% 550,000 250,000 850,000 1,650,000 550,000 A 850,000 300,000 180,000 B 120,000 C Dr Cr 850,000 550,000 A 180,000 B 120,000 C

Cash Tyler, Capital Howell, Capital Parks, Capital

#3

Howell, Capital Parks, Capital Tyler investment Total Tyler Interest 1/3rd Howell reduction 60% Parks reduction 40%

550,000 250,000 175,000 975,000 325000 D 195000 E 130000 F Dr Cr 175,000 195,000 130,000 325,000 D E F

Cash Tyler, Capital Howell, Capital Parks, Capital

#6

a b c d e f

330,000 315,000 $5.50 $12.00 $5.50

(1,650,000 divided by 5) (330,000 issued minus 15,000 treasury stock) ($1,650,000 plus $165,000)/330,000 ($180,000/15,000) (# of shares issued X par value) + paid in capital/ # of shares issued (330,000 X $5) + $165,000/330,000 135,000 15,000 shares X 25% = 3,750 shares X $12 orginal price = $45,000 $180,000 (treasury stock balance ) - $45,000 Or, just $180,000 X 75%

#7 1-Jan Organization Costs (asset) Cash 15-Jan Cash Capital Stock Additional paid in capital 30-Jan Organization Costs (asset) Capital Stock Additional paid in capital 2-Jul Land Capital Stock Additional paid in capital 5-Sep Treasury Stock Cash 6-Dec Cash Treasury Stock Additional paid in capital

Dr 2,000

Cr 2,000

3,500,000

(500,000 X7) 2,500,000 (500,000 X $5 par) 1,000,000 Value of services 2,500 (500 X $5 par) 5,500 use market value of stock 500,000 (100,000 shs X $5 par) 300,000

8,000

800,000

150,000 150,000 120,000 (11,000 shs X $11) 110,000 (11,000 shs X orginal treas price of $10) 10,000

#8 15-Sep Retained Earnings Dividends payable 1-Oct no entry 15-Oct Dividends payable Cash 1-Nov Retained Earnings

Dr 96,000

Cr $800,000 X 6% X 2 years 96,000

96,000 96,000 180,000

Dividends payable 15-Nov no entry 30-Nov Dividends payable Cash 180,000

180,000

180,000 Dr Cr 216,000

#9

Declaration Retained Earnings Dividends Payable Additional paid in capital Payment Dividends Payable Common Stock

120,000 shs X 15% X $12 market value 90,000 120,000 shs X 15% X $5 par value 126,000

90,000 90,000

#10

Using the double declining method means they deducted too much in depreciation last year and understated net income entry Accumulated Depreciation Retained Earnings 15,000 15,000 1,500,000

R/e Stmt

Retained Earnings as of Januray 1, 2009 Correction of understatment of income in prior period Retained Earnings as of January 1, 2009 as adjusted Net income Retained Earnings as of December 31, 2009

15,000 1,515,000 250,000 1,765,000

recorded on the books

shares issued

e = $45,000

orginal treas price of $10)

15% X $12 market value 15% X $5 par value

on last year and