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ACCT 001 Lecture Notes - Lecture 2: Accrual, Accounts Payable, Financial Statement

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School
College of The Sequoias
Department
Accounting (ACCT)
Course
ACCT 001
Professor
lindsay

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Document Summary

Property, plant and equipment-assets with long life spans and contribute to the operations of the firm. Depreciation is the allocation of the cost of purchased assets over many years. Intangible assets- claim to future benefits of the firm but does not have a physical or financial embodiment (most intangible assets are not recorded on the balance sheet) Current liabilities- obligations that will be paid in the coming year. Long-term liabilities- obligations to be paid after one year. Common stock- investment in assets of business by shareholders. Retained earnings -income retained for use in the business. Short-term ability of the firm to pay its immediate obligations or address short- term emergencies. Shows if a company can pay its bills. Ability for the firm to survive over the long haul . Ability to pay lt debt as it matures. Compare performance of firm over period of time. Compares firm"s performance against the entire industry it is competing.

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Related Questions

Below you will find selected information (in millions) fromCoca-Cola Co.’s 2012 Annual Report.

Income Taxes Payable

$471

Short-term Investments and Marketable Securities

8,109

Cash

8,442

Other non-current Liabilities

10,449

Common Stock

1,760

Receivables

4,812

Other Current Assets

2,973

Long-term Investments

10,448

Other Non-current Assets

3,585

Property, Plant and Equipment

23,486

Trademarks

6,527

Other Intangible Assets

20,810

Allowance for Doubtful Accounts

53

Accumulated Depreciation

9,010

Accounts Payable

8,680

Short Term Notes Payable

17,874

Prepaid Expenses

2,781

Other Current Liabilities

796

Long-Term Liabilities

14,736

Paid-in-Capital in Excess of Par Value

11,379

Retained Earnings

55,038

Inventories

3,264

Treasury Stock

35,009

Other information taken from the Annual Report.

Sales Revenue for 2012

$48,017

Cost of Goods Sold for 2012

19,053

Net Income for 2012

9,019

Inventory Balance on 12/31/11

3,092

Net Accounts Receivable Balance on 12/31/11

4,920

Total Assets on 12/31/11

79,974

Equity Balance on 12/31/11

31,921


Required: 1: Using the information provided prepare a BalanceSheet. Separate the current assets from non-current assets andprovide a total for each. Also, separate the current liabilitiesfrom the non-current liabilities and provide a total for each.

The comparative statements of financial position of Mikos Inc. as at December 31, 2017 and 2018, and its statement of earnings for the year ended December 31, 2018, are presented below:

MIKOS INC.
Comparative Statements of Financial Position
December 31
2018 2017
Assets
Cash $ 10,600 $ 18,600
Short-term investments 72,200 40,800
Accounts receivable 76,000 32,400
Inventories, at cost 57,200 41,600
Prepaid expenses 5,600 9,200
Land 51,400 78,000
Property, plant, and equipment, net 286,400 187,000
Intangible assets 25,600 31,200
$ 585,000 $ 438,800
Liabilities and Shareholders’ Equity
Accounts payable $ 18,600 $ 43,200
Income tax payable 9,200 2,600
Accrued liabilities 11,600 -0-
Long-term notes payable 126,000 182,000
Contributed capital 232,000 68,000
Retained earnings 187,600 143,000
$ 585,000 $ 438,800
MIKOS INC.
Statement of Earnings
For the Year Ended December 31, 2018
Sales $ 898,000
Cost of sales $ 446,000
Amortization expense—intangible assets 5,600
Depreciation expense—property, plant, and equipment 34,600
Operating expenses 237,000
Interest expense 13,600 736,800
Earnings before income taxes 161,200
Income tax expense 48,360
Net earnings $ 112,840
Additional information is as follows:
a. Land was sold for cash at its carrying amount.
b. The short-term investments will mature in February 2019.
c. Cash dividends were declared and paid in 2018.
d. New equipment with a cost of $167,600 was purchased for cash, and old equipment was sold at its carrying amount.
e. Long-term notes of $18,000 were paid in cash, and notes of $38,000 were converted to shares.
1. Prepare a statement of cash flows for Mikos Inc. for the year ended December 31, 2018 by using the indirect method. (Negative answers should be indicated by a minus sign.)

Uhura Company has decided to expand its operations. Thebookkeeper recently completed the balance sheet presented below inorder to obtain additional funds for expansion.

UHURA COMPANY
BALANCE SHEET
FOR THE YEAR ENDED 2014

Current assets
Cash $232,650
Accounts receivable (net) 342,650
Inventory (lower-of-average-cost-or-market) 403,650
Equity investments (trading)-at cost (fair value$123,310) 143,310
Property, plant, and equipment
Buildings (net) 573,310
Equipment (net) 163,310
Land held for future use 178,310
Intangible assets
Goodwill 82,650
Cash surrender value of life insurance 92,650
Prepaid expenses 14,650
Current liabilities
Accounts payable 138,310
Notes payable (due next year) 127,650
Pension obligation 85,310
Rent payable 51,650
Premium on bonds payable 55,650
Long-term liabilities
Bonds payable 503,310
Stockholders’ equity
Common stock, $1.00 par, authorized 400,000 shares,issued 292,650 292,650
Additional paid-in capital 162,650
Retained earnings ?


Prepare a revised balance sheet given the available information.Assume that the accumulated depreciation balance for the buildingsis $162,650 and for the equipment, $107,650. The allowance fordoubtful accounts has a balance of $19,650. The pension obligationis considered a long-term liability.