ACC 300 Lecture Notes - Lecture 3: Interest Expense, Income Statement, Retained Earnings

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purplefrog376

28 Oct 2015

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Chandler corp. began operations on january 1, 2015. Show the effect on assets, liabilities, or stockholders" equity. Performed ,000 of consulting services for rachel co. rachel co. Paid a utility bill to geller electric. Purchased land from monica co. on a ,000 note payable. Performed ,000 of services for phoebe corp. phoebe paid of the. Wolowitz company made errors in recording the following transactions during 2015. Consider each transaction independently, and assume that all other transactions were recorded properly. Write overstated , understated , or no effect in each box below. Hint: first record the journal entry wolowitz company should have made for each transaction. Transaction: wolowitz neglected to record purchase of. ,000 of inventory on account: wolowitz neglected to record ,000 of wages earned by staff this month. The wages will be paid next month: wolowitz neglected to adjust subscriptions.

Related Questions

XYZ Company - Balance Sheet As of12/31/2014
Assets
Current Assets
Cash		$ 50,000
Accounts Receivable		$ 35,000
Total Current Assets				$85,000
Long-term Investments
Investments in Hokie Co. - AFS				$25,000
Property Plant and Equipment
Printing Equipment		$100,000
less Accumulated Depreciation		$ (40,000)		$60,000
Building		$ 110,000
less Accumulated Depreciation		$ (3,667)		$106,333
Intangible Assets
Trademark				$10,000
Total Assets					$ 286,333
Liabilities and Stockholdersâ Equity
Current Liabilities
Accounts Payable	$115,000
Unearned Revenue	$45,000
Total Current Liabilities		$160,000
Total Liabilities			$ 160,000
Stockholder's Equity
Capital Stock:
Common Stock ($1 par value 10,000 shares issued)	$10,000
Additional Paid in Capital	$50,000
Total Paid in Capital		$ 60,000
Retained Earnings		$ 66,333
Total Stockholder's Equity			$126,333
Total Liabilities and Stockholder's Equity						$286,333

The Following Events Happened in 2015
1. On Jan. 1 XYZ Co. issued1000 shares of 6% $10 par preferred stock for $20,000.
2. XYZ Co. had $150,000 insales ($100,000 cash and $50,000 on account).
3. On Jan. 1 XYZ. paid$20,000 to rent a building for the next 12 months
4. XYZ purchased suppliesfor $10,000 on account
5. XYZ Co. collected $35,000in cash for settlement of outstanding accounts receivable
6. XYZ Co. provided servicesto earn all unearned revenue in 2015.
7. At the end of the yearonly $2000 of supplies remained
8. On 12-31 XYZ Companydeclared and paid preferred dividends
Other Information:
The Building has a useful life of 10 years and a salvage valueof 10,000. The company uses straight linedepreciation.
The Printing Equipment has a useful life of 10 years and asalvage value of 50,000. The company uses straight linedepreciation.
XYZ Co's Income Tax Rate is 30 percent and taxes will not bepaid until 2016.

1:What would XYZ Company report for revenue onthe 2015 Income Statement?

2:What would XYZ Company report for total operatingexpenses on the 2015 Income Statement?

3:What would XYZ Company report for Net Incomeon the 2015 Income Statement?

4: What would XYZ Company report for total currentassets on the 2015 Balance Sheet?

5: What would XYZ Company report for totalliabilities on the 2015 Balance Sheet?

6: What would XYZ Company report for additional paid incapital for preferred stock on the 2015 Balance Sheet?

7: What would XYZ Company report for total stockholders'equity on the 2015 Balance Sheet?

8: After closing entries, howdoes Event #2 affect stockholders' equity?

Event #2: XYZ Co. had $150,000 in sales ($100,000 cash and$50,000 on account).

9: After closing, how does Event #6 affect the BalanceSheet?

Event #6: Blazer Co. provided services to earn allunearned revenue in 2015.

10: After closing entries, how doesEvent #7 affect the Balance Sheet?

Event #7: At the end of the year only $2000 of suppliesremained

harlequinlion173

Problem 1-33Interrelationships among financial statements Crawford Enterprises started the 2014 accounting period with $75,000 of assets (all cash), $15,000 of liabilities, and $25,000 of common stock. During the year, Crawford earned cash revenues of $46,000, paid cash expenses of $26,000, and paid a cash dividend to stockholders of $5,000. Crawford also acquired $15,000 of additional cash from the sale of common stock and paid $10,000 cash to reduce the liability owed to a bank. Required a.Prepare an income statement, statement of changes in stockholdersâ equity, period-end balance sheet, and statement of cash flows for the 2014 accounting period. (Hint: Determine the amount of beginning retained earnings before considering the effects of the current period events. It also might help to record all events under an accounting equation before preparing the statements.) b.Determine the percentage of total assets that were provided by creditors, investors, and earnings. c.Determine the balance in the Revenue, Expense, and Dividends accounts as of January 1, 2015. LO 1-2, 1-3, 1-4, 1-5, 1-6, 1-7 CHECK FIGURES a. Net Income: $19,000 e. Net Cash Flow from Operating Activities: $19,000

lavenderwombat729

CASH FLOWS
	Instructions:
1.	Prepare journal entries for the selectedtransactions listed below.
2.	Based on the account information in the ledger, theselected transactions below,
	and the other financial statements, preparetheStatement of Cash Flows
	for ABC Company for the year ended June 30,2014
3.	Answer questions A-D.

1. PREPARE THE JOURNAL ENTRIES.

	Some of ABC Company's January transactions arelisted below. They have been
	already been posted to the ledger.

	Partial list of fiscal year ended June 30, 2014transactions for ABC Company:
	a.	Issued 5,000 shares of $1 par common stock forcash, $50,000
	b.	Sold investment for $35,000 of cash.
	c.	Redeemed $55,000 bonds at face value.
	d.	Declared $4,000 in dividends.
	e.	Recorded depreciation on equipment, $18,500
	f.	Paid $3,500 in cash for dividends
	g.	Purchased equipment for cash, $13,450


	PARTIAL JOURNAL		Debit	Credit
a.



b.



c.


d.


e.


f.


g.

DO NOT POSTJOURNAL ENTRIES PREPARED IN INSTRUCTION #1 (THEY ARE ALREADYINCLUDED BELOW).

		LEDGER

		Cash #100				Accounts Pay. #200				Service Revenue #500
	7/1/13	42,480					4,900	7/1/13			0	7/1/13
	activity	101,850	62,350			22,800	21,500				106,500
	a.	50,000					3,600	6/30/14			106,500
	b.	35,000
			55,000	c.
			3,500	f.		Dividends Pay. #210				Depreciation Exp. #600
			13,450	g.			700	7/1/13		0		7/1/13
	6/30/14	95,030			f.	3,500	4,000	d.	e.	18,500
							1,200	6/30/14		18,500
		Accounts Rec. #115
	7/1/13	5,000
		50,400	45,750			Bonds Payable #220				RentExpense #603
	6/30/14	9,650					100,000	7/1/13		0		7/1/13
					c.	55,000				24,000
							45,000	6/30/14		24,000
		Supplies #116
	7/1/13	3,660
		3,050	4,160
	6/30/14	2,550				Common Stock #320				Supplies Expense 610
							10,000	7/1/13		0		7/1/13
							5,000	a.		4,160
							15,000	6/30/14		4,160
		Invest. in XYZ Co #120
	7/1/13	20,000
			20,000	b.		PIC in Ex of Par-CS #322				Salaries Expense #620		7/1/13
	6/30/14	0					20,000	7/1/13		0		7/1/13
							45,000	a.		34,000
							65,000	6/30/14		34,000
		Equipment #130
	7/1/13	86,920
	g.	13,450				Retained Earnings #400				Gain on Sale #700
	6/30/134	100,370					13,160	7/1/13			0	7/1/13
											15,000	b.
											15,000
		Accum. Deprec. #131				Cash Dividends #410
			9,300	7/1/13		0		7/1/13
			18,500	e.	d.	4,000
			27,800	6/30/14		4,000


		Before
		158,060	158,060	-
		After
		292,260	292,260	-

FINANCIALSTATEMENTS

ABC Company						ABC Company
Income Statement						Comparative Balance Sheet
For the Year Ended June 30,2014						June 30,
										2014		2013		Amount of		Type of
Revenue:						Assets								Inc/(Dec)		Activity(ies)
	Service revenue			$	106,500	Current assets:
Operating expenses:							Cash		$	95,030	$	42,480	_____		___
	Depreciation Expense	$	18,500				Accounts Receivable			9,650		5,000	_____		___
	Rent Expense		24,000				Supplies			2,550		3,660	_____		___
	Supplies Expense		4,160					Total current assets		107,230		51,140
	Salaries Expense		34,000			Plant Assets:
	Total operating expenses				80,660		Equipment			100,370		86,920	_____		____
Income from operations					25,840		Less:	Accumulated Depreciation		27,800		9,300	_____		____
								Total plant assets		72,570		77,620
Other revenue:						Investments				0		20,000	_____		____
Gain on sale		$	15,000			Total Assets			$	179,800	$	148,760
Total other revenue					15,000
Net income				$	40,840	Liabilities
						Current liabilities:
							Accounts Payable		$	3,600	$	4,900	_____		_____
							Dividends Payable			1,200		700	_____		_____
								Total current liabilities		4,800		5,600
ABC Company						Long-term liabilities:
Statement of RetainedEarnings							Bonds Payable			45,000		100,000	_____		_____
For the Year Ended June 30,2014								Total liabilities		49,800		105,600

Retained earnings, July 1,2013				$	13,160	Stockholders' Equity
Net income		$	40,840			Paid in capital :
Less:	Dividends		4,000				Common Stock, $1 par, 50,000 authorized			15,000		10,000	______		_____
Increase in retainedearnings					36,840		Paid in Capital in Excess of Par			65,000		20,000	______		_____
Retained earnings, June 30,2014				$	50,000			Total paid in capital		80,000		30,000
						Retained Earnings				50,000		13,160	______		_____
								Total stockholders' equity		130,000		43,160
						Total liabilities and stockholders' equity			$	179,800	$	148,760


	2. COMPLETE THE STATEMENT OF CASH FLOWS.

	ABC Company
	Statement of Cash Flows
	For the Year Ended June 30, 2014
	Cash flows from operating activities:
		Net income			$
		Adjustments to reconcile net income to netcash
		flow from operating activities:
					$

			Changes in current operating assets andliabilities:





						$

	Cash flows from investing activities:
					$
		Less:




	Cash flows from financing activities:
					$
		Less:		$






	Cash at beginning of period

	Cash at end of period					$



3. QUESTIONS

A.	If the corporation reported income and expensesusing the cash basis (instead of accrual),
	what impact did operational transactions have oncash?			Increase/Decrease Amount		$

B.	What was the of largest specific source of cashinflow during the year?


C.	What was the largest specific source of cashoutflow during the year?


D.	The ending cash balance on the Statement of CashFlows should match the cash balance
	on which other financial statement?

whitesalmon442

ACC 300 Lecture Notes - Lecture 3: Interest Expense, Income Statement, Retained Earnings

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