Any accountants here? (career/homework help)

[ZBomber]

Are there any accountants on the forum? I'm in my junior year and I am currently majoring in accounting... except, well, I'm not exactly sure it's what I wanna do for a living.  It would be cool if someone here does it because they might be able to answer some of my questions about what the job entails, etc.


Also, I'm working on something for one of my classes. I have two concerns.
The first of which is this damned balance sheet. I know I did it wrong because it's not balanced. It's off by $2800. A trick my professor taught me is to split that in half, look for that value, and your error usually lies there. And it might be that I subtracted it when I should have added, but I don't think that's right... (the one I'm looking at is premium on bonds payable)
This is the problem:


(that last line should say total liabilities+se)

https://i.imgur.com/1UJUe.jpg
https://i.imgur.com/IGa6U.jpg

The other problem I have is with capital stock/additional paid in capital. This whole area is just kind of baffling to me, and I don't think I ever really had a strong foundation on it since the teacher that taught me it was a little bit crazy and didn't do much teaching.  For this problem, I have to fill in the missing values. For 2010, I know that I can get the liabilities by subtracting the equity from assets, but I just can't seem to figure out the equity section. If someone could help me figure out how to do the capital stock/additional paid-in fields, that would be great.

https://i.imgur.com/HejuL.jpg


I have to pass this in tomorrow morning, so yeah, it's kind of late.  I finished the rest of the problems, but these two issues are preventing me from finishing up these... and help would be greatly appreciated! (especially if it's by 9am tomorrow )

[Nick]

I'll look over this, but meanwhile can you email the excel sheets to Rush3737@yahoo.com?

[Nick]

For the first part I think it's the premium on bonds payable that is the issue. You are correct that it should be taken out of long term debt, but it also needs to be recorded in current debt. My guess is the 23,000 includes that 1,400 taken out, so if you erase that and add 1,400 to current debt you'll have things balanced.

[Nick]

For #2, can it be assumed that no new stock was issued or recalled?

[ZBomber]

I'll look over this, but meanwhile can you email the excel sheets to Rush3737@yahoo.com?

Sent you an e-mail, thanks Nick! 


I'm replying to your answer to #1 because I'm not entirely sure if that's the case, but for #2, the only additional information given that I didn't include is
"The company did not issue any common stock during 2011"

Typing up my response to question 1 now, just thought I'd post this now because it's gonna take me a minute to figure out the first part. 

[ZBomber]

For the first part I think it's the premium on bonds payable that is the issue. You are correct that it should be taken out of long term debt, but it also needs to be recorded in current debt. My guess is the 23,000 includes that 1,400 taken out, so if you erase that and add 1,400 to current debt you'll have things balanced.

I figured it had to be the premium, because the only other thing that was 1400 was the wages payable, and that didn't seem out of place at all. But are you sure about adding it to the current debt though? I think my professor said that bonds payables over a year long are always going to be long-term, and this one is set for 2020. Those two values (bonds payable and the premium) were given individually in the book, so I'm just not sure if it is already included in the long term bonds payable.

Here's a link I found on it...
https://blog.accountingcoach.com/premium-bond-discount/
it seems to support the example in the text book too, where "unamortized bond discount" is placed under bonds payable in the long term liabilities


Maybe I'm just completely missing the point though, my brain is kind of fried from working on this all night.  Thoughts?

[Nick]

Okay, perfect. Then basically the Capital stock section stays constant for 2010 and 2011. And from there it's simply math calculations using the Accounting formula and even simpler computations within the sections from there.

If I remember correct paid in capital doesn't change unless new stock is issued. It's basically the difference between par value and the selling price.

[Nick]

For the first part I think it's the premium on bonds payable that is the issue. You are correct that it should be taken out of long term debt, but it also needs to be recorded in current debt. My guess is the 23,000 includes that 1,400 taken out, so if you erase that and add 1,400 to current debt you'll have things balanced.

I figured it had to be the premium, because the only other thing that was 1400 was the wages payable, and that didn't seem out of place at all. But are you sure about adding it to the current debt though? I think my professor said that bonds payables over a year long are always going to be long-term, and this one is set for 2020. Those two values (bonds payable and the premium) were given individually in the book, so I'm just not sure if it is already included in the long term bonds payable.

Here's a link I found on it...
https://blog.accountingcoach.com/premium-bond-discount/
it seems to support the example in the text book too, where "unamortized bond discount" is placed under bonds payable in the long term liabilities


Maybe I'm just completely missing the point though, my brain is kind of fried from working on this all night.  Thoughts?

I was always taught to use a current portion of long term debt category, basically saying that this is the portion that will be owed over the next year. However if you have been told to do it that way then present it that way, most important thing is that the numbers line up.

[ZBomber]

Okay, perfect. Then basically the Capital stock section stays constant for 2010 and 2011. And from there it's simply math calculations using the Accounting formula and even simpler computations within the sections from there.

If I remember correct paid in capital doesn't change unless new stock is issued. It's basically the difference between par value and the selling price.

  I don't think I ever would have figured that out... for some reason I wasn't making the connection between no common stock being issued and the numbers of shares for 2011 staying the same.

And as for the first question, I think I will print out your solution too and ask my professor tomorrow morning about it. You could be perfectly right, but I'm pretty sure the way my professor taught me to do it was different. From the little experience I've had, it seems that there are a million diffferent ways to do accounting under different standards, which is actually why I'm having second thoughts about following it as my major. 

Thanks so much Nick, you're a life saver!  If anyone could weigh in on the first question, that would be cool too, as I'm still a bit confused with that one.

[Nick]

Glad I could help. I got my Accounting degree in 08 and have done basically jack shit with it since, so it's nice to think back on stuff like this from time to time.