ACC 201 Lecture Notes - Lecture 8: Income Statement

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sapphirechinchilla660

24 Apr 2017

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Sales discount - (attempt to lessen payment defaults) is a loss to shareholders (revenue ) Specific identification identifying each cost of individual units to maintain precise cost of goods sold (car dealership tracking vehicle costs by vin #) 2 oranges on hand at the start of the month (each cost 10 cents), 3 purchased during the month (each cost 12 cents), one unknown orange remaining at the end of the month. First-in-first-out (fifo) oldest inventory on hand is sold before newer inventory. Cogs = (2*10) + (2*12) = 44 cents (income statement) End inventory = (1*12) = 12 cents (balance sheet) Last-in-first-out (lifo) newest inventory on hand is sold before older inventory. Cogs = (3*12) + (1*10) = 46 cents. Weighted average use the overall average to find average cost per orange, use value to answer the other questions. Weighted average = ((2*10) + (3*12)) / (5) = 11. 2 cents/orange. Weighted end inventory = (1*11. 2) = 11. 2 cents.

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WeaverCompany
Comparative Balance Sheet
	2014	2013
Assets
Cash	$9	$15
A/R	340	240
Inventory	125	175
Prepaid Expenses	10	6
Total current assets	484	436
PPE	610	470
Less accumulated depreciation	93	85
Net PPE	517	385
Long-term investments	16	19
Total assets	$1,017	$840

Liabliites and S/E
A/P	$310	$230
Accrued Liablities	60	72
Income taxes payable	40	34
Total current liabilities	$410	$336
Bonds payable	290	180
Total liabilities	$700	$516
Common Stock	210	250
R/E	107	74
Total S/E	317	324
Total lliabilities and S/E	$1,017	$840

Weaver Company
Income Statement
For the Year Ended December31, 2014
Sales		$800
COGS		500
Gross Margin		300
Selling and admin.Expenses		213
Net operating income		87
Nonoperating items:
Gain on sale of investments	$7
Loss on sale of equipment	-4	$3
Income before taxes		$90
Income taxes		27
Net income		$63

During 2014, Weaver sold someequipment for $20 that had cost $40 and on which there
was accumulated depreciationof $16. In addition, the company sold long-term investments
for $10 that had cost $3 whenpurchased several years ago. A cash dividend was paid during
2014 and the companyrepurchased $40 of its own stock. Weaver did not retire anybonds
during 2014.

Using the indirect method,prepare a statement of cash flows.
Weaver Company
Income Statement
For the Year Ended December31, 2014

apricotcat350

WeaverCompany
Comparative Balance Sheet
	2014	2013
Assets
Cash	$9	$15
A/R	340	240
Inventory	125	175
Prepaid Expenses	10	6
Total current assets	484	436
PPE	610	470
Less accumulated depreciation	93	85
Net PPE	517	385
Long-term investments	16	19
Total assets	$1,017	$840

Liabliites and S/E
A/P	$310	$230
Accrued Liablities	60	72
Income taxes payable	40	34
Total current liabilities	$410	$336
Bonds payable	290	180
Total liabilities	$700	$516
Common Stock	210	250
R/E	107	74
Total S/E	317	324
Total lliabilities and S/E	$1,017	$840

Weaver Company
Income Statement
For the Year Ended December31, 2014
Sales		$800
COGS		500
Gross Margin		300
Selling and admin.Expenses		213
Net operating income		87
Nonoperating items:
Gain on sale of investments	$7
Loss on sale of equipment	-4	$3
Income before taxes		$90
Income taxes		27
Net income		$63

During 2014, Weaver sold someequipment for $20 that had cost $40 and on which there
was accumulated depreciationof $16. In addition, the company sold long-term investments
for $10 that had cost $3 whenpurchased several years ago. A cash dividend was paid during
2014 and the companyrepurchased $40 of its own stock. Weaver did not retire anybonds
during 2014.

Using the indirect method,prepare a statement of cash flows.
Weaver Company
Income Statement
For the Year Ended December31, 2014


Can you please explain how to get thisanswer.

skycamel85

The transactions completed by PS Music during June 2018 weredescribed at the end of Chapter 1. The following transactions werecompleted during July, the second month of the businessâsoperations: Jul. 1 Peyton Smith made an additional investment in PSMusic in exchange for common stock by depositing $5,000 in PSMusicâs checking account. 1 Instead of continuing to share officespace with a local real estate agency, Peyton decided to rentoffice space near a local music store. Paid rent for July, $1,750.1 Paid a premium of $2,700 for a comprehensive insurance policycovering liability, theft, and fire. The policy covers a one-yearperiod. 2 Received $1,000 on account. 3 On behalf of PS Music,Peyton signed a contract with a local radio station, KXMD, toprovide guest spots for the next three months. The contractrequires PS Music to provide a guest disc jockey for 80 hours permonth for a monthly fee of $3,600. Any additional hours beyond 80will be billed to KXMD at $40 per hour. In accordance with thecontract, Peyton received $7,200 from KXMD as an advance paymentfor the first two months. 3 Paid $250 on account. 4 Paid anattorney $900 for reviewing the July 3 contract with KXMD. (Recordas Miscellaneous Expense.) 5 Purchased office equipment on accountfrom Office Mart, $7,500. 8 Paid for a newspaper advertisement,$200. 11 Received $1,000 for serving as a disc jockey for a party.13 Paid $700 to a local audio electronics store for rental ofdigital recording equipment. 14 Paid wages of $1,200 toreceptionist and part-time assistant. Enter the followingtransactions on Page 2 of the two-column journal: Jul. 16 Received$2,000 for serving as a disc jockey for a wedding reception. 18Purchased supplies on account, $850. 21 Paid $620 to Upload Musicfor use of its current music demos in making various music sets. 22Paid $800 to a local radio station to advertise the services of PSMusic twice daily for the remainder of July. 23 Served as discjockey for a party for $2,500. Received $750, with the remainderdue August 4, 2018. 27 Paid electric bill, $915. 28 Paid wages of$1,200 to receptionist and part-time assistant. 29 Paidmiscellaneous expenses, $540. 30 Served as a disc jockey for acharity ball for $1,500. Received $500, with the remainder due onAugust 9, 2018. 31 Received $3,000 for serving as a disc jockey fora party. 31 Paid $1,400 royalties (music expense) to National MusicClearing for use of various artistsâ music during July. 31 Paiddividends, $1,250. PS Musicâs chart of accounts and the balance ofaccounts as of July 1, 2018 (all normal balances), are as follows:11 Cash $3,920 12 Accounts Receivable 1,000 14 Supplies 170 15Prepaid Insurance â 17 Office Equipment â 21 Accounts Payable 25023 Unearned Revenue â 31 Common Stock 4,000 33 Dividends 500 41Fees Earned 6,200 50 Wages Expense 400 51 Office Rent Expense 80052 Equipment Rent Expense 675 53 Utilities Expense 300 54 MusicExpense 1,590 55 Advertising Expense 500 56 Supplies Expense 180 59Miscellaneous Expense 415 Required: 1. Enter the July 1, 2018,account balances in the appropriate balance column of a four-columnaccount. No entry is needed for accounts with a zero balance. WriteBalance in the Item column, and select a check mark in the PostingReference column. (Note: Verify the equality of the debit andcredit balances in the ledger before proceeding with the nextinstruction.) 2. Analyze and journalize each transaction in atwo-column journal beginning on Page 1, omitting journal entryexplanations. Refer to the Chart of Accounts for exact wording ofaccount titles. 3. Post the journal to the ledger, extending theaccount balance to the appropriate balance column after eachposting. Indicate a zero balance by inserting a 0 (zero) in eitherof the Balance columns opposite the entry. 4. Prepare an unadjustedtrial balance as of July 31, 2018. none of the previous answershave the entire answers

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ACC 201 Lecture Notes - Lecture 8: Income Statement

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