1. Presented below is selected account information related to Matty Perry Inc.

As of December
21, 2015. All these accounts have debit balances.

Cable television franchises Film Contract rights

Music copyright Customer lists
Research and development costs prepaid expenses
Goodwill Covenants not to compete
Cash Brand names
Account receivable Notes receivable
Property, plant, and equipment invesments in associated companies
Internet domain name organization costs
land

Instructions

Identify which items should be classified as an intangible asset. For those items not classified
as an intangible asset, indicate where they would be reported in the financial statements.

2. Described below are certain transactions of Edwardson Corporation. The company uses the
periodic inventory system.
1. On february 2, the corporation purchased goods from Martin Company for $70,000
subject to cash discount terms of 2/10, n/30. Purchases and accounts payable are
recorded b on February 26.
2. On April 1, the corporation bought a truck for $50,000, paying $4,000 in cash and signing
a one year, 12% note for the balance of the purchase price.
3. On August 1, the board of directors declares a $300,000 cash divident that was payable
on September 10 to shareholders of record on August 31.

Instructions

a. Make all journal entries necessary to record of transaction above using appropriate
dates.
b. Edwardson corporation’s year-end is December 31. Assuming that no adjusting entries
relative to the transactions above have been recorded, prepare any adjusting journal
entries concerning interest that are necessary to present fair financial statements at
December 31.
3. Prsented below are various account balance.
a. Bank loan payable of a winery, due March 10, 2018 (the product requires aging for 5
years before sale)
b. Serial bonds payeble, $1,000,000, of which $250,000 are due each july 31.
c. Amounts withheld from employee wages for income tax.
d. Notes payable due January 15, 2017
e. Credit balance of $ 2,000,000 maturing June 30, 2016
f. Bond payable of $2,000,000 maturing June 30, 2016
g. Overdraft of $ 1,000 in a bank account (no other balance are carried at this bank)
h. Deposit made by customers who have ardered goods
 Instructions

Indicate whether aech of the items above should be classified on December 31, 2015, as a
current liability a non-current liability, or under some other classification. Consider each one
independently from all others, that is, do not assume that all of them relate to one
particular business. If the classification of some of the items is doubtful, explain why in each
case.

4. During its first year of operations, Sitwell Corporation had the following transactions pertaining
to its ordinary shares.
Jan 10 issued 80,000 share for cash at $ 6 per share.
Mar 1 issued 5,000 shares to attorneys in payment of a bill for $35,000 for services rendered in
helping the company to incorporate.
July 1 issued 30,000 shares for cash at $8 per share
Sept 1 issued 60,000 shares for cash at $ 10 per share

Instruction
a. Prepare the journal entries for these transaction, assuming that the ordinary shares have a
par value of $3 per share
b. Briefly discuss how the entries in part (a) will change if the shares are no-par with a stated
value of $2 per share.

5. Hartman Inc. Issues 500 share of $10 par value ordinary share and 100 shares of $100 par value
preference shares for a lump sum of $100,000.
Instructions
a. Prepare the journal entry for the issuance when the fair value of the ordinary shares
is $168 each and fair value of the preference shares is $210 each. (Round to the
nearest euro)
b. Prepare the journal entry for the issuance when only the fair value of the ordinary
shares ($170 per share) in known.