ACTG 2011 Lecture Notes - Lecture 1: Book Value, Fuselage, Balance Sheet

93 views6 pages

cerisehorse97

15 Sep 2016

School

Department

Course

Professor

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

Document Summary

Capital assets resources that contribute to earning revenue over more than one period by helping an entity produce, supply, support, or make available the goods or services it offers to its customers. Types: property plant and equipment, intangibles, and good will. Ownership isn"t necessary to list an asset on the balance sheet (ex: companies that are leasing assets) Certain items (even though most people would agree they have future benefits) don"t appear on the balance sheet such as investments made in employees. Property, plant, and equipment - tangible assets used to produce or supply goods or services to customers, rented to customers, or used for administrative purposes. Company that has a large proportion of ppe is known as a capital intensive business. Intangible assets capital assets without physical substance. Goodwill an intangible asset that arises when one business acquires another and pays more than the fair value of the net identifiable assets purchased.

Related Questions

Management of XYZ Company prepare classified balance sheetsusing these classifications:

Indicate the balance sheetclassification of each of the items that are listed below. Assumethe balance sheet is as of 12/31/14. If the item is not presentedon the balance sheet place an âXâ next to the item If the item is acontra account within the particular classification, placeparentheses around the classification.

A classification may be used more thanonce or not at all.

Balance SheetClassifications:

Current Assets

Property Plant & Equipment

Investments

Intangible Assets & Other

Current Liabilities

Non-current Liabilities

Contributed Capital

Earned Capital

Accumulated Other ComprehensiveIncome

Note: The first item isdemonstrated for you.

a.(Current Asset) Allowancefor doubtful accounts.

b._______________ Customers' accountswith credit balances.

c.________________ Bond sinkingfund.

d._______________ Salaries which thecompany's cash budget shows will be paid to employees in 2015.

e._______________ Accumulateddepreciationâequipment.

f._______________ Appropriation forplant expansion.

g._______________ Amortization ofpatents for 2014.

h._______________ On December 31,2014, management signed a purchase commitment to buy all of its rawmaterials from its primary vendor for the next 2 years.

i.________________ Discount on bondspayable due March 31, 2017.

j.________________ Launching of thecompanyâs online retailing division in February, 2015.

k._______________ Cash dividendsdeclared on 12/15/14 payable to stockholders on 1/15/15.

lemonlion562

Prepare a multiple-step income statement for the year endedDecember 31, 2016, concluding with earnings per share. In computingearnings per share, assume that the average number of common sharesoutstanding was 100,000 and preferred dividends were $100,000.(Round earnings per share to the nearest cent.)

â¢

Refer to the Chart of Accounts for exact wording of accounttitles.

â¢

Refer to the Labels and Amount Descriptions for exact wording oftext entries.

Prepare a retained earnings statement for the year endedDecember 31, 2016.

â¢	Refer to the Chart of Accounts for exact wording of accounttitles.
â¢	Refer to the Labels and Amount Descriptions for exact wordingof text entries.
â¢	You will need to enter the word âLessâ or âAddâ asnecessary.

Prepare a balance sheet in report form as of December 31, 2016.You are not required to present the details of Preferred and CommonStock (i.e., number of shares authorized, issued and outstanding).

â¢	Refer to the Chart of Accounts for exact wording of accounttitles.
â¢	Refer to the Labels and Amount Descriptions for exact wordingof text entries.
â¢	âLessâ , âDeductâ, âAddâ and colons will appearautomatically.
â¢	Available-for-sale investments should be reported as a singleasset on the balance sheet, regardless of how many accounts existin the ledger for such assets.
â¢	Recall that current assets are to be reported in order ofliquidity. Available-for-sale investments are considered to be moreliquid that accounts receivable.
â¢	Report fixed assets and paid-in capital accounts inaccount-number order.
â¢	Omit the description of bonds and stocks (i.e., percentagerates, due date, number of shares, etc.)
â¢	Enter all amounts as positive numbers, with one exception: Ifan unrealized loss has occurred, it must be reported as a negativeamount on the balance sheet.

Labels

In CengageNOW, a Label is a text entry that does not have anamount associated with it.

Current assets

Current liabilities

December 31, 2016

For the Year Ended December 31, 2016

Intangible assets

Investments

Less dividends

Long-term liabilities

Operating expenses

Other income and expenses

Paid-in capital

Add dividends

Property, plant, and equipment

Amount Descriptions

In CengageNOW, an Amount Description is a text entry other thanan Account that has an amount associated with it.

Available-for-sale investments

Decrease in retained earnings

Excess of issue price over par

Gross profit

Income before income tax

Income from operations

Increase in retained earnings

Miscellaneous selling expense

Net income

Net loss

Retained earnings, January 1, 2016

Retained earnings, December 31, 2016

Sales commissions

Sales salaries expense

Store supplies expense

Total administrative expenses

Total assets

Total (before treasury stock)

Total current assets

Total current liabilities

Total liabilities

Total liabilities and stockholdersâ equity

Total long-term liabilities

Total investments

Total operating expenses

Total paid-in capital

Total property, plant, and equipment

Total selling expenses

Total stockholdersâ equity

Unamortized premium

Unamortized discount

Income Statement data:
Advertising expense	$ 150,000
Cost of merchandise sold	3,700,000
Delivery expense	30,000
Depreciation expense-office buildings and equipment	30,000
Depreciation expense-store buildings and equipment	100,000
Dividend revenue	4,500
Gain on sale of investments	4,980
Income from Pinkberry Co. investment	76,800
Income tax expense	140,500
Interest expense	21,000
Interest revenue	2,720
Miscellaneous administrative expense	7,500
Miscellaneous selling expense	14,000
Office rent expense	50,000
Office salaries expense	170,000
Office supplies expense	10,000
Sales	5,254,000
Sales commissions	185,000
Sales salaries expense	385,000
Store supplies expense	21,000

Retained earnings and balance sheet data:
Accounts payable	$ 194,300
Accounts receivable	545,000
Accumulated depreciationâoffice buildings and equipment	1,580,000
Accumulated depreciationâstore buildings and equipment	4,126,000
Allowance for doubtful accounts	8,450
Available-for-sale investments (at cost)	260,130
Bonds payable, 5%, due 2024	500,000
Cash	246,000
Common stock, $20 par
(400,000 shares authorized; 100,000 shares issued, 94,600outstanding)	2,000,000
Dividends:
Cash dividends for common stock	155,120
Cash dividends for preferred stock	100,000
Goodwill	500,000
Income tax payable	44,000
Interest receivable	1,125
Investment in Pinkberry Co. stock (equity method)	1,009,300
Investment in Dream Inc. bonds (long term)	90,000
Merchandise inventory (December 31, 2016),
at lower of cost (FIFO) or market	778,000
Office buildings and equipment	4,320,000
Paid-in capital from sale of treasury stock	13,000
Excess of issue price over par:
-Common	886,800
-Preferred	150,000
Preferred 5% stock, $80 par
(30,000 shares authorized; 20,000 shares issued)	1,600,000
Premium on bonds payable	19,000
Prepaid expenses	27,400
Retained earnings, January 1, 2016	9,319,725
Store buildings and equipment	12,560,000
Treasury stock
(5,400 shares of common stock at cost of $33 per share)	178,200
Unrealized gain (loss) on available-for-sale investments	(6,500)
Valuation allowance for available-for-sale investments	(6,500)

none

Chart of Accounts

CHART OF ACCOUNTS

Equinox Products Inc.

General Ledger

	ASSETS
110	Cash
121	Accounts Receivable
122	Allowance for Doubtful Accounts
131	Merchandise Inventory
132	Interest Receivable
133	Prepaid Expenses
141	Investments-Solstice Corp.
142	Investment in Pinkberry Co. Stock
143	Investment in Dream Inc. Bonds
144	Valuation Allowance for Available-for-Sale Investments
181	Store Buildings and Equipment
182	Accumulated Depreciation-Store Buildings and Equipment
183	Office Buildings and Equipment
184	Accumulated Depreciation-Office Buildings and Equipment
191	Goodwill

	LIABILITIES
211	Accounts Payable
221	Income Tax Payable
225	Cash Dividends Payable
251	Bonds Payable
252	Discount on Bonds Payable
253	Premium on Bonds Payable

	EQUITY
311	Preferred Stock
312	Paid-in Capital in Excess of Par-Preferred Stock
321	Common Stock
322	Paid-in Capital in Excess of Par-Common Stock
331	Retained Earnings
341	Cash Dividends
351	Treasury Stock
352	Paid-in Capital from Sale of Treasury Stock
361	Unrealized Gain (Loss) on Available-for-Sale Investments

	REVENUE
410	Sales
611	Dividend Revenue
621	Interest Revenue
631	Income from Pinkberry Co.
641	Gain on Sale of Investments

	EXPENSES
511	Cost of Merchandise Sold
512	Bad Debt Expense
520	Sales Salaries Expense
521	Sales Commissions
522	Office Salaries Expense
531	Advertising Expense
532	Delivery Expense
537	Store Supplies Expense
538	Office Supplies Expense
539	Office Rent Expense
541	Income Tax Expense
551	Depreciation Expense-Store Equipment
552	Depreciation Expense-Office Equipment
591	Miscellaneous Selling Expense
592	Miscellaneous Administrative Expense
710	Interest Expense
731	Loss on Sale of Investments

none

Labels and Amount Descriptions

Labels In CengageNOW, a Label is a text entry that does not have anamount associated with it.
Current assets
Current liabilities
December 31, 2016
For the Year Ended December 31, 2016
Intangible assets
Investments
Less dividends
Long-term liabilities
Operating expenses
Other income and expenses
Paid-in capital
Add dividends
Property, plant, and equipment
Amount Descriptions In CengageNOW, an Amount Description is a text entry other thanan Account that has an amount associated with it.
Available-for-sale investments
Decrease in retained earnings
Excess of issue price over par
Gross profit
Income before income tax
Income from operations
Increase in retained earnings
Miscellaneous selling expense
Net income
Net loss
Retained earnings, January 1, 2016
Retained earnings, December 31, 2016
Sales commissions
Sales salaries expense
Store supplies expense
Total administrative expenses
Total assets
Total (before treasury stock)
Total current assets
Total current liabilities
Total liabilities
Total liabilities and stockholdersâ equity
Total long-term liabilities
Total investments
Total operating expenses
Total paid-in capital
Total property, plant, and equipment
Total selling expenses
Total stockholdersâ equity
Unamortized premium
Unamortized discount

copperwombat133

1) Which of the following items would be reported net of taxesafter income from continuing operations?

Select one:

a. Gain or loss on the sale of property.

b. Loss due to a factory strike.

c. Interest expense.

d. Gain or loss on the sale of a major segment of theentity.

Given the following list of accounts, calculate TotalAssets:

Accounts Receivable	$ 5,000
Capital Stock	20,000
Cash	14,300
Equipment	15,400
Fees Earned	44,400
Miscellaneous Expense	18,200
Rent Expense	4,150
Retained Earnings	6,550
Wages Expense	13,900

Select one:

a. $54,700

b. $26,550

c. $79,100

d. $34,700

Which of the following is NOT associated with accrual basisaccounting?

Select one:

a. Income statement.

b. Matching principle.

c. Statement of cash flows.

d. Revenue recognition principle.

Which of the following is an example of an intangible asset?

Select one:

a. Trademark

b. Timber

c. Equipment

d. Marketable securities

Which of the following would be shown under the financingactivities section on the statement of cash flows?

Select one:

a. Cash received from customers.

b. The payment of cash to retire a long-term note.

c. Depreciation expense.

d. The proceeds from the sale of a building.

A machine was purchased for $32,000 on April 1st. It has auseful life of 5 years and a residual value of $4,000. What is thedepreciation expense for the first fiscal year ending on December31st under the straight-line method?

Select one:

a. $1,400

b. $6,400

c. $4,200

d. $5,600

The entry to record the signing of a contract to receiveinventory and make payment at a future date includes

Select one:

a. No debits or creditsâjust a memorandum.

b. A debit to cost of goods sold.

c. A credit to cash.

d. A debit to inventory.

An inventory cost flow assumption is NOT needed for a productline

Select one:

a. If all of the inventory available for sale was purchased atthe same unit cost.

b. If all of the inventory looks the same.

c. If there is still some inventory on hand at the end of theyear.

d. If there is no beginning inventory carried over from theprevious accounting period.

Fees received this period from customers for services to beperformed in the next accounting period, would be a(n)

Select one:

a. Expense disclosed on the statement of cash flows.

b. Revenue disclosed on the income statement.

c. Liability disclosed on the balance sheet.

d. Item not included on the financial statements until the nextaccounting period.

10)

Which of the following is TRUE of a corporation?

Select one:

a. They are incorporated with a national agency.

b. At least one owner has unlimited liability.

c. They are a separate taxable entity.

d. More than 70% of businesses are organized this way.

11)

The effects on the accounts of recording the cost of merchandisesold for cash using a perpetual inventory system include an

Select one:

a. Increase in Accounts Payable.

b. Increase in Merchandise Inventory.

c. Increase in Sales.

d. Increase in Cost of Goods Sold;

12)

Which of the following is NOT a limitation of externallyreported accounting information?

Select one:

a. The income statement contains atypical data due to the timingof the fiscal year end.

b. Accounting information relies on estimates.

c. Management has some discretion regarding the reportingclassification and choice of accounting measurement methods.

d. There is a hodge-podge of valuation techniques used on thefinancial statements.

13)

Given the following information regarding merchandise inventoryat the end of the fiscal year:

Ending inventory at cost $34,000

Ending inventory at market $33,400

Which of the following is correct?

Select one:

a. No journal entry should be made based upon the informationgiven.

b. Inventory should be reported on the balance sheet at$34,000.

c. Inventory should be reported on the balance sheet at$33,400.

d. A journal entry should be made to recognize a gain of$600.

14)

Which of the following describes the closing process when acompany has net earnings for the period?

Select one:

a. The Dividends account is debited for its balance.

b. The individual asset accounts are credited for theirbalances.

c. The individual expense accounts are debited for theirbalances.

d. The Income Summary account is debited for its balance.

ACTG 2011 Lecture Notes - Lecture 1: Book Value, Fuselage, Balance Sheet

Document Summary

Get access

Related Documents

ACTG 2011 Final: Complete and Comprehensive 55-Page Final Exam Notes that Cover Chapter 8-12

ACTG 2011 Lecture Notes - Lecture 1: Intangible Asset, Capital Cost, Historical Cost

ACTG 2011 Chapter Notes - Chapter 8: Capital Asset, Intangible Asset, Book Value

Related Questions