Table 13-12
the Following Accounts and Related Balances of FYI

question 88

Essay

Table 13-12
The following accounts and related balances of FYI Advertising Ltd. are as at December 31, 2017 prior to the closing journal entries.
$\begin{array}{|l|r|}\hline \text { Accrued Liabilities } & \$ 50,400 \\\hline \text { Preferred Shares, } \$ 2.50, \text { cumulative, } 24,000 \text { authorized and } & \\ \text { Issued } & 240,000 \\\hline \text { Prepaid Expenses } & 3,600 \\\hline \text { Accounts Payable } & 90,000 \\\hline \text { Interest Expense } & 29,000 \\\hline \text { Trademark, net } & 20,400 \\\hline \text { Long-term Note Payable } & 600,000 \\\hline \text { Property, Plant, and Equipment, net } & 3,360,000 \\\hline \text { Retained Earnings } & 623,600 \\\hline \text { Accounts Receivable, net } & 318,000 \\\hline \text { Inventory } & 420,000 \\\hline \text { Common Shares, } 300,000 \text { shares authorized; } 200,000 \text { shares } & \\ \text { Issued } & 2,500,000 \\\hline \text { Cash } & 384,000 \\\hline \text { Organization Costs } & 18,000\\\hline\end{array}$ Additional information:
$$\begin{array} { l l } \text { Total Assets, january } 1,2017 & \$ 4,100,000 \\\text { Net income for } 2017 & \$ 420,000\end{array}$$ No new shares were issued in 2017.
-Referring to Table 13-12,prepare journal entries for the following transactions:
Dec 31 Close the income summary account
Dec 31 The entry to record anortizing $4,000 of the crganization costs
Dec 31 The entry to record the declaration of a $ 80 , 000 cash dividend. $$\begin{array}{l}\quad\quad\quad\quad\quad\quad\quad\text { Jaurnal }\\\begin{array} { l | l | l | l } \hline \text { Date } & \text { Description } & \text { Debit } & \text { Credit } \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline\end{array}\end{array}$$

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Definitions:

Rate Of Return

The rise or fall in an investment's value over a set period, shown as a percentage of the investment's initial expense.

Annual Dividend

The total amount of dividend that is paid by a company to its shareholders annually, typically represented as a sum of money for each share held.

Market Rate

The prevailing interest rate available in the marketplace on investments, loans, and deposits, reflecting the current cost of borrowing or the return on investment.

Required Return

The minimum annual percentage yield that an investor expects or requires from an investment.