This workbook is Financial Accounting by Antle amp; Garstka.
APANY FINANCIAL ACCOUNTINGPrepare the debits and credits to proceedings the liquidation of the up-front costs of1, 2004.E2-7 On December 31, 2004, Sellit, Inc.:(1) Obtains $20,000 currency by selling sordid hoard. Assume that the hoard is sold atpar treasure.(2) Obtains $40,000 currency from Loanit Bank. The hypothecation is due on December 31, 2007, andinterest of 10 percent year-by-year on the redress is due on January 1 of each year, ex-cluding January 1, 2005.(3) Buys place, paying $5,000 currency.(4) Hires superintendent to initiate effort on January 1, 2005. The compensation is $1,000 per month,payable on the chief of each month, initiatening February 1, 2005.(5) Prepays six-months' divulsion on a light fabric, paying $3,000 currency.a. Prepare a redress subterfuge for Sellit as of the end of interest on December 31, 2004(i.e., refecting the precedent transactions).b. If Sellit were liquidated (i.e., all liabilities were remunerated and all cherishing property were soldwith the pay reserved to sordid hoard shareholders) at the start of busi-ness on January 1, 2005, how fur currency would the shareholders admit?c. Could Sellit pay a currency dividend to sordid hoard shareholders on January 1, 2005?How capacious could that dividend be? Would anyone slight be overturn if Sellit remunerated a capaciouscurrency dividend on January 1, 2005? Who?P2-1 You are troublesome to collate Oshkosh B'Gosh's financial position at December 29, 2001