Prepare a complete statement of cash flows; report its cash flows from operating activities according to the direct method.
Golden Corp., a merchandiser, recently completed its 2017
operations. For the year, (1) all sales are credit sales, (2) all
credits to Accounts Receivable reflect cash receipts from
customers, (3) all purchases of inventory are on credit, (4) all
debits to Accounts Payable reflect cash payments for inventory, (5)
Other Expenses are all cash expenses, and (6) any change in Income
Taxes Payable reflects the accrual and cash payment of taxes. The
company’s balance sheets and income statement follow.
| GOLDEN CORPORATION Comparative Balance Sheets December 31, 2017 and 2016 |
|||||||
| 2017 | 2016 | ||||||
| Assets | |||||||
| Cash | $ | 164,000 | $ | 107,000 | |||
| Accounts receivable | 83,000 | 71,000 | |||||
| Inventory | 601,000 | 526,000 | |||||
| Total current assets | 848,000 | 704,000 | |||||
| Equipment | 335,000 | 299,000 | |||||
| Accum. depreciation—Equipment | (158,000 | ) | (104,000 | ) | |||
| Total assets | $ | 1,025,000 | $ | 899,000 | |||
| Liabilities and Equity | |||||||
| Accounts payable | $ | 87,000 | $ | 71,000 | |||
| Income taxes payable | 28,000 | 25,000 | |||||
| Total current liabilities | 115,000 | 96,000 | |||||
| Equity | |||||||
| Common stock, $2 par value | 592,000 | 568,000 | |||||
| Paid-in capital in excess of par value, common stock | 196,000 | 160,000 | |||||
| Retained earnings | 122,000 | 75,000 | |||||
| Total liabilities and equity | $ | 1,025,000 | $ | 899,000 | |||
| GOLDEN CORPORATION Income Statement For Year Ended December 31, 2017 |
|||||
| Sales | $ | 1,792,000 | |||
| Cost of goods sold | 1,086,000 | ||||
| Gross profit | 706,000 | ||||
| Operating expenses | |||||
| Depreciation expense | $ | 54,000 | |||
| Other expenses | 494,000 | 548,000 | |||
| Income before taxes | 158,000 | ||||
| Income taxes expense | 22,000 | ||||
| Net income | $ | 136,000 | |||
Additional Information on Year 2017 Transactions
Required:
Prepare a complete statement of cash flows; report its cash flows
from operating activities according to the direct
method. (Amounts to be deducted should be
indicated with a minus sign.)
In: Accounting
Briefly describe the proper accounting (financial reporting) for each of the following items:
a. Change in Accounting Principle
B. change in accounting estimate
c. errors (mistakes or oversights) uncovered in previously issued financial statements
In: Accounting
On December 31, 2020, Ivanhoe Inc. has a machine with a book value of $1,297,200. The original cost and related accumulated depreciation at this date are as follows.
| Machine |
$1,794,000 |
|
| Less: Accumulated depreciation |
496,800 |
|
| Book value |
$1,297,200 |
Depreciation is computed at $82,800 per year on a straight-line
basis.
Presented below is a set of independent situations. For each
independent situation, indicate the journal entry to be made to
record the transaction. Make sure that depreciation entries are
made to update the book value of the machine prior to its
disposal.
A fire completely destroys the machine on August 31, 2021. An insurance settlement of $593,400 was received for this casualty. Assume the settlement was received immediately. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
August 31, 2021 |
enter an account title to record current depreciation |
enter a debit amount |
enter a credit amount |
|
enter an account title to record current depreciation |
enter a debit amount |
enter a credit amount |
|
|
(To record current depreciation.) |
|||
|
August 31, 2021 |
enter an account title to record loss of the machine |
enter a debit amount |
enter a credit amount |
|
enter an account title to record loss of the machine |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record loss of the machine |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record loss of the machine |
enter a debit amount |
enter a credit amount |
|
|
(To record loss of the machine.) |
eTextbook and Media
List of Accounts
On April 1, 2021, Ivanhoe sold the machine for $1,435,200 to Yoakam Company. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
April 1, 2021 |
enter an account title to record current depreciation |
enter a debit amount |
enter a credit amount |
|
enter an account title to record current depreciation |
enter a debit amount |
enter a credit amount |
|
|
(To record current depreciation.) |
|||
|
April 1, 2021 |
enter an account title to record sale of the machine |
enter a debit amount |
enter a credit amount |
|
enter an account title to record sale of the machine |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record sale of the machine |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record sale of the machine |
enter a debit amount |
enter a credit amount |
|
|
(To record sale of the machine.) |
On July 31, 2021, the company donated this machine to the
Mountain King City Council. The fair value of the machine at the
time of the donation was estimated to be $1,518,000.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No Entry" for the account titles and enter 0 for the
amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
July 31, 2021 |
enter an account title to record current depreciation |
enter a debit amount |
enter a credit amount |
|
enter an account title to record current depreciation |
enter a debit amount |
enter a credit amount |
|
|
(To record current depreciation.) |
|||
|
July 31, 2021 |
enter an account title to record donation of the machine |
enter a debit amount |
enter a credit amount |
|
enter an account title to record donation of the machine |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record donation of the machine |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record donation of the machine |
enter a debit amount |
enter a credit amount |
|
|
(To record donation of the machine.) |
In: Accounting
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:
| Fixed Component per Month |
Variable Component per Job |
Actual Total for February |
|||||||
| Revenue | $ | 360 | $ | 18,950 | |||||
| Technician wages | $ | 6,400 | $ | 6,450 | |||||
| Mobile lab operating expenses | $ | 2,900 | $ | 35 | $ | 4,530 | |||
| Office expenses | $ | 2,600 | $ | 2 | $ | 3,050 | |||
| Advertising expenses | $ | 970 | $ | 995 | |||||
| Insurance | $ | 1,680 | $ | 1,680 | |||||
| Miscellaneous expenses | $ | 500 | $ | 3 | $ | 465 | |||
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $2,900 plus $35 per job, and the actual mobile lab operating expenses for February were $4,530. The company expected to work 50 jobs in February, but actually worked 52 jobs.
Required:
Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
In: Accounting
|
BLOSSOM INC. |
||||||
|
12/31/17 |
12/31/16 |
|||||
| Cash |
$5,900 |
$6,900 |
||||
| Accounts receivable |
61,400 |
50,800 |
||||
| Short-term debt investments (available-for-sale) |
35,000 |
17,800 |
||||
| Inventory |
40,000 |
59,400 |
||||
| Prepaid rent |
5,000 |
3,900 |
||||
| Equipment |
155,200 |
129,000 |
||||
| Accumulated depreciation—equipment |
(35,000 |
) |
(25,000 |
) |
||
| Copyrights |
45,600 |
49,900 |
||||
| Total assets |
$313,100 |
$292,700 |
||||
| Accounts payable |
$46,300 |
$39,800 |
||||
| Income taxes payable |
3,900 |
6,100 |
||||
| Salaries and wages payable |
7,900 |
3,900 |
||||
| Short-term loans payable |
8,000 |
10,100 |
||||
| Long-term loans payable |
60,100 |
68,400 |
||||
| Common stock, $10 par |
100,000 |
100,000 |
||||
| Contributed capital, common stock |
30,000 |
30,000 |
||||
| Retained earnings |
56,900 |
34,400 |
||||
| Total liabilities & stockholders’ equity |
$313,100 |
$292,700 |
||||
|
BLOSSOM INC. |
||||
| Sales revenue |
$338,600 |
|||
| Cost of goods sold |
174,500 |
|||
| Gross profit |
164,100 |
|||
| Operating expenses |
119,100 |
|||
| Operating income |
45,000 |
|||
| Interest expense |
$11,400 |
|||
| Gain on sale of equipment |
1,900 |
9,500 |
||
| Income before tax |
35,500 |
|||
| Income tax expense |
7,100 |
|||
| Net income |
$28,400 |
|||
Additional information:
| 1. | Dividends in the amount of $5,900 were declared and paid during 2017. | |
| 2. | Depreciation expense and amortization expense are included in operating expenses. | |
| 3. | No unrealized gains or losses have occurred on the investments during the year. | |
| 4. | Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2017 |
prepare a statement of cash flows using direct method
In: Accounting
Write a short report (220–250 words) on the business needs and expectations of a bookkeeper, comparing the role of the bookkeeper with that of an accountant.
In: Accounting
In: Accounting
| The income statement of Rodriquez Company is shown below: | ||||||
| RODRIQUEZ COMPANY | ||||||
| Income Statement | ||||||
| For The Year Ended December 31, 2012 | ||||||
| Sales | $6,900,000 | |||||
| Cost of goods sold | ||||||
| Beginning inventory | $1,900,000 | |||||
| Purchases | 4,400,000 | |||||
| Goods available for sale | 6,300,000 | |||||
| Ending inventory | 1,600,000 | |||||
| Cost of goods sold | 4,700,000 | |||||
| Gross profit | 2,200,000 | |||||
| Operating expenses | ||||||
| Selling expenses | 450,000 | |||||
| Administrative expenses | 700,000 | 1,150,000 | ||||
| Net income | $1,050,000 | |||||
| Additional information: | ||||||
| 1. Accounts receivable decreased | $310,000 | during the year. | ||||
| 2. Prepaid expenses increased | $170,000 | during the year. | ||||
| 3. Accounts payable to suppliers of merchandise decreased | $275,000 | during the year. | ||||
| 4. Accrued expenses payable decreased | $120,000 | during the year. | ||||
| 5. Administrative expenses include depreciation expense of | $60,000 | |||||
| Instructions: | ||||||
|
Prepare the operating activities section of the statement of cash
flows for the year ended December 31, 2012, for Rodriquez Company, using the direct method. |
||||||
In: Accounting
Terry company's 2017 income statement and comparative balance sheets at December 31 of 2016 and 2017are shown.
Terry Company
Income Statement
For the year Ended December 31, 2017
Sales $ 390,000
Cost of Goods Sold 235,000
_______
Gross Profit $ 155,000
Wages Expenses $ 63,000
Depreciation Expense 14,000
Other Operating Expenses 26,000
Income Tax Expense 17,000 120,000
______ ________
Net Income $ 35,000
Terry Company
Balance Sheets
Dec. 31, Dec. 31,
Assets 2016 2017
Cash $ 16,000 $ 30,000
Accounts Receivable (net) 28,000 35,000
Inventory 110,000 84,000
Prepaid Expense 12,000 8,000
Plant Assets 178,000 130,000
Accumulated Depreciation (76,000) (62,000)
Total Assets $ 268,000 $ 225,000
Liabilities and Stockholders' Equity
Accounts Payable $ 27,000 $ 14,000
Wages Payable 6,000 2,500
Income Tax Payable 3,000 4,500
Common Stock 135,000 125,000
Retained Earnings 97,000 79,000
________ _________
Total Liabilities and $ 268,000 $ 225,000
Stockholders' Equity
Cash dividends of $17,000 were declared and paid during 2016 Plant assets of $48,000 were purchased for cash, and later in the year, an additional $10,000 common stock was issued for cash
REQUIRED
Prepare only the Cash Flows from Operations section of the Cash Flow Statement using the
indirect method.
Reminder: you need only prepare the Cash Flow from Operations section of the statement
In: Accounting
| The comparative balance sheets for Hinckley Corporation show the following information: | ||||||
| December 31 | ||||||
| 2012 | 2011 | |||||
| Cash | $33,500 | $13,000 | ||||
| Accounts receivable | 12,250 | 10,000 | ||||
| Inventory | 12,000 | 9,000 | ||||
| Investments | 0 | 3,000 | ||||
| Building | 0 | 29,750 | ||||
| Equipment | 45,000 | 20,000 | ||||
| Patent | 5,000 | 6,250 | ||||
| Totals | $107,750 | $91,000 | ||||
| Allowance for doubtful accounts | $3,000 | $4,500 | ||||
| Accumulated depreciation on equipment | 2,000 | 4,500 | ||||
| Accumulated depreciation on building | 0 | 6,000 | ||||
| Accounts payable | 5,000 | 3,000 | ||||
| Dividends payable | 0 | 5,000 | ||||
| Notes payable, short-term (nontrade) | 3,000 | 4,000 | ||||
| Long-term notes payable | 31,000 | 25,000 | ||||
| Common stock | 43,000 | 33,000 | ||||
| Retained earnings | 20,750 | 6,000 | ||||
| Totals | $107,750 | $91,000 | ||||
| Additional data related to 2012 are as follows: | ||||||
| 1. Equipment that had cost | $11,000 | and was | 40% | depreciated at time of | ||
| disposal was sold for | $2,500 | |||||
| 2. | $10,000 | of the long-term note payable was paid by issuing common stock. | ||||
| 3. Cash dividends paid were | $5,000 | |||||
| 4. On January 1, 2012, the building was completely destroyed by a flood. Insurance proceeds | ||||||
| on the building were | $30,000 | (net of | $2,000 | taxes). | ||
| 5. Investments (available-for-sale) were sold at | $1,700 | above their cost. The | ||||
| company has made similar sales and investments in the past. | ||||||
| 6. Cash of was paid for the acquisition of equipment. | ||||||
| 7. A long-term note for | $16,000 | was issued for the acquisition of equipment. | ||||
| 8. Interest of | $2,000 | and income taxes of | $6,500 | were paid in cash. | ||
| Instructions: | ||||||
|
Prepare a statement of cash flows using the indirect method. Flood damage is unusual and infrequent in that part of the country. |
||||||
In: Accounting
Zippy Shoe Co. uses a periodic inventory system. Zippy purchased 430 pairs of shoes at $69 each in June, 990 pairs in August at $71 each, and 620 pairs in December at $74 each. Zippy sold 1,895 pairs of shoes during the year.
Required:
Calculate the company's ending inventory and cost of goods sold
using the each of following inventory costing methods.
In: Accounting
On January 1 Criquet Co. acquired an interest in the Tamlee Co. for $500,000. At December 31, Tamlee Co. declared and paid a cash dividend of $50,000 and reported a net income of $160,000.
REQUIRED:
Prepare the journal entries for the Criquet Co. under each of the independent circumstances:
a. Criquet Co. acquires a 10% interest in the Tamlee Co.
b. Criquet Co. acquires a 25% interest in the Tamlee Co.
In: Accounting
| Financial data for Joel de Paris, Inc., for last year follow: |
| Joel de Paris, Inc. Balance Sheet |
||||
| Beginning Balance |
Ending Balance |
|||
| Assets | ||||
| Cash | $ | 137,000 | $ | 132,000 |
| Accounts receivable | 337,000 | 475,000 | ||
| Inventory | 572,000 | 488,000 | ||
| Plant and equipment, net | 814,000 | 805,000 | ||
| Investment in Buisson, S.A. | 405,000 | 428,000 | ||
| Land (undeveloped) | 250,000 | 248,000 | ||
| Total assets | $ | 2,515,000 | $ | 2,576,000 |
| Liabilities and Stockholders' Equity | ||||
| Accounts payable | $ | 375,000 | $ | 336,000 |
| Long-term debt | 1,018,000 | 1,018,000 | ||
| Stockholders' equity | 1,122,000 | 1,222,000 | ||
| Total liabilities and stockholders' equity | $ | 2,515,000 | $ | 2,576,000 |
| Joel de Paris, Inc. Income Statement |
|||
| Sales | $ | 4,512,000 | |
| Operating expenses | 3,835,200 | ||
| Net operating income | 676,800 | ||
| Interest and taxes: | |||
| Interest expense | $ 121,000 | ||
| Tax expense | 202,000 | 323,000 | |
| Net income | $ | 353,800 | |
|
The company paid dividends of $253,800 last year. The “Investment in Buisson, S.A.,” on the balance sheet represents an investment in the stock of another company. |
| Required: | |
| 1. |
Compute the company’s margin, turnover, and return on investment (ROI) for last year.(Round your answers to 2 decimal places.) |
| 2. |
The board of directors of Joel de Paris, Inc., has set a minimum required rate of return of 14%. What was the company’s residual income last year? |
In: Accounting
Weller Company's budgeted unit sales for the upcoming fiscal year are provided below:
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |
| Budgeted unit sales | 16,000 | 18,000 | 15,000 | 14,000 |
The company’s variable selling and administrative expense per unit is $1.50. Fixed selling and administrative expenses include advertising expenses of $9,000 per quarter, executive salaries of $35,000 per quarter, and depreciation of $15,000 per quarter. In addition, the company will make insurance payments of $4,000 in the first quarter and $4,000 in the third quarter. Finally, property taxes of $6,000 will be paid in the second quarter.
Required:
Prepare the company’s selling and administrative expense budget for the upcoming fiscal year. (Round "Per Unit" answers to 2 decimal places.)
In: Accounting
Direct Materials Variances
Bellingham Company produces a product that requires six standard pounds per unit. The standard price is $10.5 per pound. If 6,200 units used 37,900 pounds, which were purchased at $10.08 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| a. Direct materials price variance | $ | |
| b. Direct materials quantity variance | $ | |
| c. Direct materials cost variance | $ |
Direct Labor Variances
Bellingham Company produces a product that requires 10 standard direct labor hours per unit at a standard hourly rate of $19.00 per hour. If 6,400 units used 65,300 hours at an hourly rate of $18.05 per hour, what is the direct labor (a) rate variance, (b) time variance, and (c) cost variance? Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| a. Direct labor rate variance | $ | |
| b. Direct labor time variance | $ | |
| c. Direct labor cost variance | $ |
In: Accounting