Transcript Lesson 14-1 - Independent School District 518
LESSON 14-1
Distributing Corporate Earnings to Stockholders
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
STOCKHOLDERS’ EQUITY ACCOUNTS USED BY A CORPORATION page 405 2 (3000) STOCKHOLDERS’ EQUITY 3110 Capital Stock 3120 Retained Earnings 3130 Dividends 3140 Income Summary CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
DECLARING A DIVIDEND
December 15. Hobby Shack’s board of directors declared a quarterly dividend of $2.00 per share; capital stock issued is 2,500 shares; total dividend, $5,000.00. Date of payment is January 15. Memorandum No. 79.
page 406 3
2 4 1 5
1. Write the date.
2. Write the title of the account debited.
3. Write the memorandum number.
3 6
4. Write the debit amount.
5. Write the title of the account credited.
6. Write the credit amount.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
PAYING A DIVIDEND
January 15. Paid cash for quarterly dividend declared December 15, $5,000.00. Check No. 379.
page 407 4
5 1 2 3 4
1. Write the date.
2. Write the account title.
3. Write the check number.
4. Write the debit account.
5. Write the credit amount.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
TERMS REVIEW retained earnings dividends board of directors declaring a dividend 5 page 408 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
LESSON 14-2
Beginning an 8-Column Work Sheet for a Merchandising Business
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
RECORDING A TRIAL BALANCE ON A WORK SHEET 7 page 410 1. Account title 2. Account balance
1
3. Total, prove, and rule the debit and credit columns CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
2 3
LESSON 14-1
ANALYZING AND RECORDING SUPPLIES ADJUSTMENTS page 411 8 Adj. (a) Supplies Expense —Office 2,730.00
Dec. 31 Bal.
(Adj Bal.
Adj. (b) Supplies — Office 3,480.00
750.00)
Adj. (a) Supplies Expense — Store 2,910.00
Dec. 31 Bal.
(Adj Bal.
Supplies — Store 3,944.00
1,034.00)
Adj. (b) CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2,730.00
2,910.00
LESSON 14-1
RECORDING SUPPLIES ADJUSTMENTS ON A WORK SHEET page 412 9
3 2 3 1
1. Write the debit amounts in the Adjustments Debit column.
2. Write the credit amounts in the Adjustments Credit column.
3. Label the two parts of the
Supplies —Office a
and small letter
b
in parentheses.
adjustment with small letter CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
ANALYZING AND RECORDING A PREPAID INSURANCE ADJUSTMENT 10 page 413 1. Enter the amount of insurance used in the Adjustments Credit column.
2. Enter the same amount in the Adjustments Debit column.
3. Label the two parts of the adjustment with a small letter
c
parentheses.
in CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
3 2 3 1
LESSON 14-1
LESSON 14-3
Planning and Recording a Merchandise Inventory Adjustment
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
MERCHANDISE INVENTORY 12 page 415 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
13 ANALYZING AND RECORDING A MERCHANDISE INVENTORY ADJUSTMENT page 416
3 1 3 2
1. Write the debit amount.
2. Write the credit amount.
3. Label the two parts of this adjustment with a small letter
d
in parentheses.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
ANALYZING AN ADJUSTMENT WHEN ENDING MERCHANDISE INVENTORY IS GREATER THAN BEGINNING MERCHANDISE INVENTORY 14 page 417 Jan. 1 Bal.
Adj. (d)
(New Bal.
Merchandise Inventory 294,700.00
4,200.00
298,900.00)
Income Summary Adj. (d) 4,200.00
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
TERM REVIEW merchandise inventory 15 page 418 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
LESSON 14-4
Planning and Recording an Allowance for Uncollectible Accounts Adjustment
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
17 ALLOWANCE METHOD OF RECORDING LOSSES FROM UNCOLLECTIBLE ACCOUNTS page 419 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
ESTIMATING UNCOLLECTIBLE ACCOUNTS EXPENSE Total Sales on Account $124,500.00
× Percentage = × 1% = Estimated Uncollectible Accounts Expense $1,245.00
18 page 420 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
19 ANALYZING AND RECORDING AN ADJUSTMENT FOR UNCOLLECTIBLE ACCOUNTS EXPENSE page 421 1. Enter the estimated uncollectible amount.
2. Enter the same amount in the Adjustments Debit column.
3. Label the two parts with a small letter
e
in parentheses.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
3 2 3 1
LESSON 14-1
TERMS REVIEW uncollectible accounts allowance method of recording losses from uncollectible accounts book value book value of accounts receivable 20 page 422 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
LESSON 14-5
Planning and Recording Depreciation Adjustments
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
22 CALCULATING DEPRECIATION EXPENSE AND BOOK VALUE
(continued on next slide)
page 424 1.
Subtract the asset’s estimated salvage value from original cost.
2. Divide the estimated total depreciation expense by the years of estimated useful life.
Original Cost $1,250.00
– – Estimated Salvage Value $250.00
= = Estimated Total Depreciation Expense $1,000.00
1
Estimated Total Depreciation Expense $1,000.00
÷ ÷ Years of Estimated Useful Life 5 = = Annual Depreciation Expense $200.00
2
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
23 CALCULATING DEPRECIATION EXPENSE AND BOOK VALUE
(continued from previous slide)
page 424 20X2 Accumulated Depreciation $400.00
+ + 20X3 Depreciation Expense $200.00
= = 20X3 Accumulated Depreciation $600.00
Original Cost $1,250.00
– Accumulated Depreciation = – $600.00
= Ending Book Value $650.00
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
24 ANALYZING AND RECORDING ADJUSTMENTS FOR DEPRECIATION EXPENSE page 425 1. Write the debit amounts.
2. Write the credit amounts.
3. Label the adjustments.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
3 1 3 2
LESSON 14-1
TERMS REVIEW current assets plant assets depreciation expense estimated salvage value straight-line method of depreciation accumulated depreciation book value of a plant asset CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 25 page 426 LESSON 14-1
LESSON 14-6
Calculating Federal Income Tax and Completing a Work Sheet
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning
FEDERAL INCOME TAX EXPENSE ADJUSTMENT 27 page 427 Total of Income Statement Credit column
Less
total of Income Statement Debit column before federal income tax
Equals
Net Income before Federal Income Tax $ 500,253.10
–396,049.91
$ 104,203.19
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
28 CALCULATING FEDERAL INCOME TAX page 428 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
29 RECORDING THE FEDERAL INCOME TAX ADJUSTMENT page 429
1 3 1 3
1. Calculate the amount of federal income tax expense adjustment.
2
2. Total and rule the Adjustments columns.
3. Extend account balances.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
COMPLETING A WORK SHEET 30 page 430
1 1 2 4 5 3
1. Total the Income Statement and Balance Sheet columns.
2. Calculate and enter the net income after federal income tax.
3. Extend the net income amount.
4. Calculate the column totals.
5. Rule double lines.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
A COMPLETED 8-COLUMN WORK SHEET 31 page 432 CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1
A 10-COLUMN WORK SHEET
1 2 3 5
32 page 434-435 1. Trial balance 2. Adjustments 3. Extend adjusted balances 4. Total, prove, and rule
4 6
5. Extend balances 6. Calculate net income; total, prove and rule CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-1