ACCT 2102 Lecture Notes - Lecture 4: Basis Of Accounting, Cash Flow, Net Income
Get access
Related Documents
Related Questions
IKIBAN INC. | ||||||||
2015 | 2014 | |||||||
Assets | ||||||||
Cash | $ | 96,500 | $ | 56,200 | ||||
Accounts receivable, net | 69,300 | 51,400 | ||||||
Inventory | 66,600 | 96,800 | ||||||
Prepaid expenses | 5,100 | 6,400 | ||||||
Total current assets | 237,500 | 210,800 | ||||||
Equipment | 135,200 | 120,000 | ||||||
Accum. depreciation—Equipment | (28,900 | ) | (10,500 | ) | ||||
Total assets | $ | 343,800 | $ | 320,300 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 26,900 | $ | 32,200 | ||||
Wages payable | 7,100 | 16,700 | ||||||
Income taxes payable | 2,500 | 4,100 | ||||||
Total current liabilities | 36,500 | 53,000 | ||||||
Notes payable (long term) | 42,000 | 70,000 | ||||||
Total liabilities | 78,500 | 123,000 | ||||||
Equity | ||||||||
Common stock, $5 par value | 240,000 | 189,000 | ||||||
Retained earnings | 25,300 | 8,300 | ||||||
Total liabilities and equity | $ | 343,800 | $ | 320,300 | ||||
IKIBAN INC. | ||||||
Sales | $ | 673,000 | ||||
Cost of goods sold | 407,000 | |||||
Gross profit | 266,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 53,000 | ||||
Other expenses | 66,900 | |||||
Total operating expenses | 119,900 | |||||
| 146,100 | |||||
Other gains (losses) | ||||||
Gain on sale of equipment | 2,600 | |||||
Income before taxes | 148,700 | |||||
Income taxes expense | 59,480 | |||||
Net income | $ | 89,220 | ||||
a. A $28,000 note payable is retired at its $28,000 carrying (book) value in exchange for cash.
b. The only changes affecting retained earnings are net income and cash dividends paid.
c. New equipment is acquired for $63,800 cash.
d. Received cash for the sale of equipment that had cost $48,600, yielding a $2,600 gain.
e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
f. All purchases and sales of inventory are on credit.
|
|
(2) Compute the company's cash flow on total assets ratio for its fiscal year 2015.
The most recent comparative balance sheet of Giacomelli Corporation appears below:
Ending Balance | Beginning Balance | |
Assets: | ||
Current assets: | ||
Cash and cash equivalents | $37,000 | $29,000 |
Accounts receivable | 20,000 | 24,000 |
Inventory | 65,000 | 61,000 |
Prepaid expenses | 5,000 | 7,000 |
Total current assets | 127,000 | 121,000 |
Property, plant, and equipment | 424,000 | 399,000 |
Less accumulated depreciation | 231,000 | 200,000 |
Net property, plant, and equipment | 193,000 | 199,000 |
Total assets | $320,000 | $320,000 |
Liabilities and Stockholders’ Equity | ||
Current liabilities: | ||
Accounts payable | $19,000 | $17,000 |
Accrued liabilities | 58,000 | 51,000 |
Income taxes payable | 47,000 | 42,000 |
Total current liabilities | 124,000 | 110,000 |
Bonds payable | 77,000 | 80,000 |
Total liabilities | 201,000 | 190,000 |
Stockholders’ equity: | ||
Common stock | 31,000 | 30,000 |
Retained earnings | 88,000 | 100,000 |
Total stockholders’ equity | 119,000 | 130,000 |
Total liabilities and stockholders’ equity | $320,000 | $320,000 |
The company uses the indirect method to construct the operating activities section of its statements of cash flows.
Which of the following is correct regarding the operating activities section of the statement of cash flows?
The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be added to net income | ||
The change in Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be added to net income | ||
The change in Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be subtracted from net income | ||
The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be subtracted from net income |