6.
Selected information about income statement accounts for the
Reed Company is presented below (the company's fiscal year ends on
December 31):
| 2021 | 2020 | |||
| Sales revenue | $ | 5,300,000 | $ | 4,400,000 |
| Cost of goods sold | 3,040,000 | 2,180,000 | ||
| Administrative expense | 980,000 | 855,000 | ||
| Selling expense | 540,000 | 482,000 | ||
| Interest revenue | 168,000 | 158,000 | ||
| Interest expense | 236,000 | 236,000 | ||
| Loss on sale of assets of discontinued component | 120,000 | — | ||
On July 1, 2021, the company adopted a plan to discontinue a
division that qualifies as a component of an entity as defined by
GAAP. The assets of the component were sold on September 30, 2021,
for $120,000 less than their book value. Results of operations for
the component (included in the above account balances)
were as follows:
| 1/1/2021–9/30/2021 | 2020 | ||||||||
| Sales revenue | $ | 580,000 | $ | 680,000 | |||||
| Cost of goods sold | (380,000 | ) | (428,000 | ) | |||||
| Administrative expense | (68,000 | ) | (58,000 | ) | |||||
| Selling expense | (38,000 | ) | (38,000 | ) | |||||
| Operating income before taxes | $ | 94,000 | $ | 156,000 | |||||
In addition to the account balances above, several events occurred
during 2021 that have not yet been reflected in the above
accounts:
Required:
Prepare a multiple-step income statement for the Reed Company for
2021, showing 2020 information in comparative format, including
income taxes computed at 25% and EPS disclosures assuming 600,000
shares of outstanding common stock. (Amounts to be deducted
should be indicated with a minus sign. Round EPS answers to 2
decimal places.)
In: Accounting
Selected information about income statement accounts for the
Reed Company is presented below (the company's fiscal year ends on
December 31):
| 2021 | 2020 | |||
| Sales revenue | $ | 5,250,000 | $ | 4,350,000 |
| Cost of goods sold | 3,030,000 | 2,170,000 | ||
| Administrative expense | 970,000 | 845,000 | ||
| Selling expense | 530,000 | 472,000 | ||
| Interest revenue | 167,000 | 157,000 | ||
| Interest expense | 234,000 | 234,000 | ||
| Loss on sale of assets of discontinued component | 116,000 | — | ||
On July 1, 2021, the company adopted a plan to discontinue a
division that qualifies as a component of an entity as defined by
GAAP. The assets of the component were sold on September 30, 2021,
for $116,000 less than their book value. Results of operations for
the component (included in the above account balances)
were as follows:
| 1/1/2021–9/30/2021 | 2020 | ||||||||
| Sales revenue | $ | 570,000 | $ | 670,000 | |||||
| Cost of goods sold | (375,000 | ) | (422,000 | ) | |||||
| Administrative expense | (67,000 | ) | (57,000 | ) | |||||
| Selling expense | (37,000 | ) | (37,000 | ) | |||||
| Operating income before taxes | $ | 91,000 | $ | 154,000 | |||||
In addition to the account balances above, several events occurred
during 2021 that have not yet been reflected in the above
accounts:
Required:
Prepare a multiple-step income statement for the Reed Company for
2021, showing 2020 information in comparative format, including
income taxes computed at 25% and EPS disclosures assuming 800,000
shares of outstanding common stock. (Amounts to be deducted
should be indicated with a minus sign. Round EPS answers to 2
decimal places.)
In: Accounting
Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions
| Date | Activities | Units Acquired at Cost | Units Sold at Retail | |||||||||
| Jan. | 1 | Beginning inventory | 600 | units | @ $40 per unit | |||||||
| Feb. | 10 | Purchase | 360 | units | @ $37 per unit | |||||||
| Mar. | 13 | Purchase | 150 | units | @ $25 per unit | |||||||
| Mar. | 15 | Sales | 765 | units | @ $80 per unit | |||||||
| Aug. | 21 | Purchase | 200 | units | @ $45 per unit | |||||||
| Sept. | 5 | Purchase | 580 | units | @ $42 per unit | |||||||
| Sept. | 10 | Sales | 780 | units | @ $80 per unit | |||||||
| Totals | 1,890 | units | 1,545 | units | ||||||||
Compute the cost assigned to ending inventory using weighted average. (Round your average cost per unit to 2 decimal places.)
Compute the cost assigned to ending inventory using weighted average. (Round your average cost per unit to 2 decimal places.)
Compute the cost assigned to ending inventory using specific
identification. For specific identification, units sold consist of
600 units from beginning inventory, 260 from the February 10
purchase, 150 from the March 13 purchase, 150 from the August 21
purchase, and 385 from the September 5 purchase. (Round
your average cost per unit to 2 decimal places.)
In: Accounting
You are a consultant that is in the last round of proposals to become the sole strategic adviser to the CEO of a top 5 global manufacturer of doors & windows. The firm sells and has a local presence in the 100 top ranked countries by GDP.
You and the other finalists have been asked to address potential Foreign Direct Investment in a non Top 100 GDP country. The CEO is seeking for a new high growth market (even if it comes with some political instability) and is asking you to select it. In your post, please provide your country selection and the primary reason why you selected it. Also briefly address how the organization would mitigate one or two major risks associated with FDI.
In: Economics
You are a consultant that is in the last round of proposals to become the sole strategic adviser to the CEO of a top 5 global manufacturer of doors & windows. The firm sells and has a local presence in the 100 top ranked countries by GDP.
You and the other finalists have been asked to address potential Foreign Direct Investment in a non Top 100 GDP country. The CEO is seeking for a new high growth market (even if it comes with some political instability) and is asking you to select it. In your post, please provide your country selection and the primary reason why you selected it. Also briefly address how the organization would mitigate one or two major risks associated with FDI.
In: Finance
You are a consultant that is in the last round of proposals to become the sole strategic adviser to the CEO of a top 5 global manufacturer of doors & windows. The firm sells and has a local presence in the 100 top ranked countries by GDP. You and the other finalists have been asked to address potential Foreign Direct Investment in a non Top 100 GDP country.
The CEO is seeking for a new high growth market (even if it comes with some political instability) and is asking you to select it. In your post, please provide your country selection and the primary reason why you selected it. Also briefly address how the organization would mitigate one or two major risks associated with FDI.
In: Economics
CA5-5 WRITING (Cash Flow Analysis) The partner in charge of the
Kappeler Corporation audit comes by your desk and leaves
a letter he has started to the CEO and a copy of the cash flow
statement for the year ended December 31, 2017. Because he must
leave
on an emergency, he asks you to finish the letter by explaining:
(1) the disparity between net income and cash flow, (2) the
importance
of operating cash flow, (3) the renewable source(s) of cash flow,
and (4) possible suggestions to improve the cash position.
Date
President Kappeler, CEO
Kappeler Corporation
125 Wall Street
Middleton, Kansas 67458
Dear Mr. Kappeler:
I have good news and bad news about the financial statements for
the year ended December 31, 2017. The good news is that net
income of $100,000 is close to what we predicted in the strategic
plan last year, indicating strong performance this year. The
bad
news is that the cash balance is seriously low. Enclosed is the
Statement of Cash Flows, which best illustrates how both of
these
situations occurred simultaneously . . .
Instructions
Complete the letter to the CEO, including the four components
requested by your boss.
In: Accounting
Stellar Company reports pretax financial income of $66,100 for
2020. The following items cause taxable income to be different than
pretax financial income.
| 1. | Depreciation on the tax return is greater than depreciation on the income statement by $14,800. | |
| 2. | Rent collected on the tax return is greater than rent recognized on the income statement by $23,900. | |
| 3. | Fines for pollution appear as an expense of $10,600 on the income statement. |
Stellar’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020.
Compute taxable income and income taxes payable for
2020.
|
Taxable income |
$enter a dollar amount | |
|---|---|---|
|
Income taxes payable |
$enter a dollar amount |
Prepare the journal entry to record income tax expense, deferred
income taxes, and income taxes payable for 2020.
(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.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
| enter an account title | enter a debit amount | enter a credit amount |
| enter an account title | enter a debit amount | enter a credit amount |
| enter an account title | enter a debit amount | enter a credit amount |
| enter an account title | enter a debit amount | enter a credit amount |
Prepare the income tax expense section of the income statement
for 2020, beginning with the line “Income before income taxes.”
(Enter negative amounts using either a negative sign
preceding the number e.g. -45 or parentheses e.g.
(45).)
| Stellar Company Income Statement (Partial) choose the accounting period December 31, 2020For the Year Ended December 31, 2020For the Quarter Ended December 31, 2020 |
||
|---|---|---|
| select an income statement item
CurrentDeferredDividendsExpensesIncome before Income TaxesIncome Tax ExpenseNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues |
$enter a dollar amount | |
| select an opening section name
CurrentDeferredDividendsExpensesIncome before Income TaxesIncome Tax ExpenseNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues |
||
| select an income statement item
Current Deferred Dividends Expenses Income before Income Taxes Income Tax Expense Net Income / (Loss) Retained Earnings, January 1 Retained Earnings, December 31 Revenues Total Expenses Total Revenues |
$enter a dollar amount | |
| select an income statement item
Current Deferred Dividends Expenses Income before Income Taxes Income Tax Expense Net Income / (Loss) Retained Earnings, January 1 Retained Earnings, December 31 Revenues Total Expenses Total Revenues |
enter a dollar amount | |
| enter a subtotal of the two previous amounts | ||
| select a closing name for this statement
CurrentDeferredDividendsExpensesIncome before Income TaxesIncome Tax ExpenseNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues |
$enter a total net income or loss amount | |
Compute the effective income tax rate for 2020.
(Round answer to 1 decimal places, e.g.
25.5%.)
| Effective income tax rate | enter the Effective income tax rate in percentages rounded to 1 decimal place | % |
In: Accounting
Exercise 11-10A Prepare a statement of cash flows—indirect method (LO11-3, 11-4, 11-5)
The balance sheets for Plasma Screens Corporation, along with additional information, are provided below:
| PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 |
||||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 144,850 | $ | 156,500 | ||||
| Accounts receivable | 76,400 | 90,000 | ||||||
| Inventory | 91,000 | 76,400 | ||||||
| Prepaid rent | 3,200 | 1,600 | ||||||
| Long-term assets: | ||||||||
| Land | 460,000 | 460,000 | ||||||
| Equipment | 756,000 | 650,000 | ||||||
| Accumulated depreciation | (418,000 | ) | (260,000 | ) | ||||
| Total assets | $ | 1,113,450 | $ | 1,174,500 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 95,000 | $ | 81,400 | ||||
| Interest payable | 6,750 | 13,500 | ||||||
| Income tax payable | 7,200 | 4,600 | ||||||
| Long-term liabilities: | ||||||||
| Notes payable | 112,500 | 225,000 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 680,000 | 680,000 | ||||||
| Retained earnings | 212,000 | 170,000 | ||||||
| Total liabilities and stockholders' equity | $ | 1,113,450 | $ | 1,174,500 | ||||
Additional Information for 2021:
Required:
Prepare the statement of cash flows using the indirect method.
(List cash outflows and any decrease in cash as negative
amounts.)
In: Accounting
Exercise 11-10A Prepare a statement of cash flows—indirect method (LO11-3, 11-4, 11-5)
The balance sheets for Plasma Screens Corporation, along with additional information, are provided below:
| PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 |
||||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 115,000 | $ | 131,200 | ||||
| Accounts receivable | 79,600 | 94,000 | ||||||
| Inventory | 99,000 | 83,600 | ||||||
| Prepaid rent | 4,800 | 2,400 | ||||||
| Long-term assets: | ||||||||
| Land | 500,000 | 500,000 | ||||||
| Equipment | 806,000 | 690,000 | ||||||
| Accumulated depreciation | (432,000 | ) | (276,000 | ) | ||||
| Total assets | $ | 1,172,400 | $ | 1,225,200 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 103,000 | $ | 88,600 | ||||
| Interest payable | 6,600 | 13,200 | ||||||
| Income tax payable | 8,800 | 5,400 | ||||||
| Long-term liabilities: | ||||||||
| Notes payable | 110,000 | 220,000 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 720,000 | 720,000 | ||||||
| Retained earnings | 224,000 | 178,000 | ||||||
| Total liabilities and stockholders' equity | $ | 1,172,400 | $ | 1,225,200 | ||||
Additional Information for 2021:
Required:
Prepare the statement of cash flows using the indirect method.
(List cash outflows and any decrease in cash as negative
amounts.)
In: Accounting