1.) For each of the following accounts, indicate whether the account shown is a temporary or...

1.)

For each of the following accounts, indicate whether the account shown is a temporary or permanent account:

Account                                   Temporary or Permanent
1. Cash                              [ Select ]                       ["Permanent", "Neither", "Temporary", "Both"]
2. Accounts Receivable                            [ Select ]                       ["Permanent", "Neither", "Both", "Temporary"]
3. Common Stock                                  [ Select ]                       ["Temporary", "Permanent", "Both", "Neither"]
4. Accounts Payable                                 [ Select ]                       ["Temporary", "Neither", "Permanent", "Both"]
5. Dividends                                       [ Select ]                       ["Permanent", "Temporary", "Both", "Neither"]
6. Retained Earnings                                   [ Select ]                       ["Permanent", "Both", "Neither", "Temporary"]
7. Rent Expense                                         [ Select ]                       ["Permanent", "Both", "Temporary", "Neither"]
8. Unearned Revenue                                  [ Select ]                       ["Permanent", "Both", "Temporary", "Neither"]

2.)

Classify each of the following items as an operating, investing, or financing activity.

1. Dividends paid.                              [ Select ]                       ["Financing", "Operating", "Investing", "All", "None"]
2. Sale of goods or services for cash.                              [ Select ]                       ["Operating", "Investing", "None", "Financing", "All"]
3. Sale of equipment.                              [ Select ]                       ["Operating", "Financing", "Investing", "All", "None"]
4. Purchase of inventory.                              [ Select ]                       ["Operating", "Investing", "None", "All", "Financing"]
5. Repayment of notes payable.                              [ Select ]                       ["Financing", "All", "Operating", "None", "Investing"]
6. Interest Received                              [ Select ]                       ["Investing", "Operating", "None", "Financing", "All"]

3.)

Wonders of Wild Life reports net income of $95,000. The accounting records reveal Depreciation Expense of $50,000 as well as increases in Prepaid Rent, Accounts Payable, and Income Tax Payable of $40,000, $23,000, and $20,000, respectively. Prepare the operating activities section of Wonders of Wild Life Cash Flow Statement using the indirect method.: ENTER SUBTRACTED AMOUNTS WITH A NEGATIVE SIGN (-)

Depreciation Expense
Increase in Prepaid Rent
Increase in Accounts Payable
Increase Income Tax Payable
Total Operating Cash Flow

Expert Solution

Part 1

Temporary accounts are classified as revene, expense and drawing accounts. The balances are not carried over from one accounting period to another but are closed or transferred to permanet accounts.

Permanet accounts are classified as asset, liability and owners equity accounts except drawing account. They are also known as real accounts whose balances are carried over from one period to another.

1	cash	permanent
2	accounts receivable	permanent
3	common stock	permanent
4	accounts payable	permanent
5	dividends	temporary
6	retained earnings	permanent
7	rent expenses	temporary
8	unearned revenue	permanent

Part 2

1	dividends paid	financing activity
2	sale of goods or services for cash	operating activity
3	sale of equipment	investing activity
4	purchase of inventory	operating activity
5	repayment of notes payable	financing activity
6	interest received	investing activity

Part 3

net income	95000
depreciation expenses	50000
increase in prepaid rent	-40000
increase in accounts payable	23000
increase in income tax payable	20000
total operating cash flow	148000

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