ACC 113 Lecture Notes - Lecture 22: Tunxis Community College, Revenue Recognition, Accrual

12 views2 pages

coralimpala133

6 Jan 2021

School

Tunxis Community College

Department

Accounting

Course

ACC 113

Professor

Tinone

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Classifies amounts into such categories as gross profit on sales, income from operations, income before taxes, and net income. Deduct the allowance for doubtful accounts from the total of accounts, notes, and interest receivable* In property, plant, & equipment deduct the accumulated depreciation equipment from the equipment cost (this is book value)* Different things balance out for different companies* Accrual-basis accounting: recognizing revenue when the performance obligation is satisfied and expenses in the period incurred, without regard to the time of receipt or payment of cash. Strict cash basis: companies record revenue only when they receive cash and expenses only when they disperse cash. Has modifications that have substantial support like capitalizing and depreciating. Often used by professional service firms plant assets or recording inventory. Going to be using accrual because cash based isn"t gaap accepted. Record when we have performed the obligation. Don"t always record when you get the cash most important difference between cash based and accrual.

Related Questions

1. Produce a balance sheet for a company that distinguishesbetween current and non-current assets and liabilities.
2. Create a balance sheet from a trial balance.
3. Create a comparison of net income based on different methods ofinventory accounting.
4. Analyze a statement of cash flows and show where each line itemcan be found or calculated from the other financialstatements.
5. Prepare a full analysis of key financial ratios for a companyand state conclusions about the financial strength of the companycompared to industry ratios.

Create a BalanceSheet from the trial balance:
		Debits	Credits	Classification

	Cash	300,000.00		Current asset

	Sales		(10,000,000.00)	Income statement

	Cost of Goods Sold	7,000,000.00		Income statement

	Selling Expenses	500,000.00		Income statement

	Other income		(50,000.00)	Income statement

	Administrative expenses	350,000.00		Income statement

	Interest Expenses	12,500.00		Income statement

	Land	300,000.00		non-current asset

	Building	2,000,000.00		non-current asset

	Long Term bond payable		(550,000.00)	non-current liability

	Accrued Liabilities		(50,000.00)	current- liability

	Accumulated Depreciation Buildings		(250,000.00)	non-current asset

	Equipment	750,000.00		non-current asset

	Receivables	100,000.00		current asset

	Allowance for doubtful accounts		(7,500.00)	current asset

	Accumulated depreciation equipment		(125,000.00)	non-current asset

	Common Stock		(200,000.00)	equity

	Payables		(115,000.00)	current Liability

	Inventories	200,000.00		current asset

	Prepaid Expenses	50,000.00		current asset

	Retained Earnings		(215,000.00)	equity



		11,562,500.00	(11,562,500.00)



Assets		Equity and Liabilities

Current Assets		Current Liabilities





Total Current Assets	-	Total Current Liabilities	-




		Total long term Liabilities	-

Total property plant and equipment	-






		Total Equity	-


Total Assets	-	Total Equity and liabilities	-

ochreelephant833

Need help completing an income statement!

Trial Balance:

Acc. #	Account Name	Debits	Credits
100	Cash	$ 66,000
110	Accounts receivable	160,000
115	Allowance for doubtful accounts		$ 7,000
120	Inventory	50,000
135	Prepaid insurance	24,750
136	Prepaid advertising	6,000
150	Land	235,000
160	Building	240,000
165	Accumulated depreciation - building		61,500
170	Equipment	150,000
175	Accumulated depreciation - equipment		53,750
190	Notes receivable	155,000
195	Interest receivable	8,590
200	Accounts payable		135,000
215	Interest payable		11,000
219	Income tax payable		12,477
230	Accrued liabilities		42,000
240	Unearned revenue		27,500
250	Notes payable - current portion		20,000
255	Notes payable - long-term portion		80,000
270	Bonds payable		100,000
300	Common stock		500,000
310	Retained earnings		21,000
350	Dividends	5,000
400	Sales		1,337,250
450	Interest revenue		94,590
500	Cost of goods sold	616,000
510	Administrative and general expenses	97,000
515	Insurance expense	2,250
520	Selling expenses	188,000
531	Depreciation expense - building	7,500
532	Depreciation expense - equipment	12,500
550	Interest expense	71,000
599	Income tax expense	12,477
600	Loss on sale of equipment	60,000
910	Loss from operation of discontinued	75,000
910	segment ofbusiness	75,000
915	Loss from disposal of discontinued	261,000
915	segment ofbusiness	261,000
		$ 2,503,067	$ 2,503,067

Income statement: (I've put in some of the numbers butI'm kinda lost with the operating expenses)

Sales		$ 1,337,250
Cost of goods sold		616,000
Gross Profit		721,250
Operating expenses
Selling expenses		188,000
Administrative and generalexpenses



Total operating expenses
Operating Income
Other revenue
Interest Revenue		94,590
Other expense and loss
Interest expense

Total other expense andloss
Income from continuingoperations before income tax
Income tax expense		113,277
Income from continuingoperations		264,313
Discontinued operations:
Loss fromoperations of discontinued segment, net of
	income tax benefit
Loss from disposalof discontinued segment, net of
	income tax benefit
Total loss from discontinuedoperations


* = Line-item is a subtotal,not an account

EPS:

The chief accountant for Monster Inc. provides you (below) withthe firmâs most recent financial statements, with some missinginformation.

BALANCE SHEET (in $ millions)	12/31/13	12/31/12
Cash	X	X
Accounts Receivable	333	212
less: Allowance for Doubtful Accounts	(36)	(11)
Prepaid Rent	9	4
Inventory	177	100
Property, Plant & Equipment	660	886
less: Accumulated Depreciation	(323)	(270)
	X	X
Accounts Payable to Suppliers	65	70
Payables for Selling & Administration	X	X
Income Taxes Payable	47	X
Dividends Payable	39	33
Common Stock	X	X
Retained Earnings	237	102
	X	X

2013 Cash Flow Statement (in $ millions))
Cash collected from customers	407
Cash paid to suppliers
Cash paid in advance for rent	(40)
Cash paid for S & A costs	X
Cash paid for income taxes	(32)
NET CASH FLOW FROM OPERATING ACTIVITIES		X
Cash received from sale of equipment	250
NET CASH FLOW FROM INVESTING ACTIVITIES		250
Cash received from issue of common stock	X
Cash dividends paid to shareholders	??
NET CASH FLOW FROM FINANCING ACTIVITIES		X

2013 INCOME STATEMENT (in $ millions)
Sales Revenue	??
Cost Of Goods Sold	(210)
Bad Debts Expense	(30)
Depreciation Expense	X
Other Operating Expenses
Income before Taxes	X
Income Tax Expense	X
Gain on the Sale of Equipment (net of $15 tax on gain)	35
NET INCOME	174

REQUIRED: Compute the amounts below, placingyour answers in the spaces provided below.

Answers: (in $millions)

Cash dividends paid to shareholders during 2013
Accounts Receivable written off during 2013
Sales Revenue during 2013
Historical cost of the equipment sold during 2013
Net book value of the equipment sold during 2013

ACC 113 Lecture Notes - Lecture 22: Tunxis Community College, Revenue Recognition, Accrual

Document Summary

Get access

Related Documents

ACC 113 Lecture Notes - Lecture 16: Tunxis Community College, Historical Cost, Financial Statement

ACC 113 Lecture Notes - Lecture 5: Tunxis Community College, Cash Flow Statement, Cash Out

ACC 113 Lecture Notes - Lecture 32: Balance Sheet, Matching Principle, Income Statement

Related Questions