ACCT 211 Lecture Notes - Lecture 15: Accounts Payable, Common Stock, Office Supplies
Get access
Related Documents
Related Questions
MC Qu. 64 Illies Corporations comparative ...
Illies Corporation's comparative balance sheet appears below:
Ending Balance | Beginning Balance | |
Assets: | ||
Current assets: | ||
Cash and cash equivalents | $40,000 | $33,000 |
Accounts receivable | 19,000 | 21,000 |
Inventory | 67,000 | 69,000 |
Total current assets | 126,000 | 123,000 |
Property, plant, and equipment | 358,000 | 339,000 |
Less accumulated depreciation | 156,000 | 132,000 |
Net property, plant, and equipment | 202,000 | 207,000 |
Total assets | $328,000 | $330,000 |
Liabilities and Stockholders’ Equity | ||
Current liabilities: | ||
Accounts payable | $18,000 | $19,000 |
Accrued liabilities | 54,000 | 59,000 |
Income taxes payable | 48,000 | 42,000 |
Total current liabilities | 120,000 | 120,000 |
Bonds payable | 82,000 | 86,000 |
Total liabilities | 202,000 | 206,000 |
Stockholders’ equity: | ||
Common stock | 23,000 | 22,000 |
Retained earnings | 103,000 | 102,000 |
Total stockholders’ equity | 126,000 | 124,000 |
Total liabilities and stockholders’ equity | $328,000 | $330,000 |
The company did not dispose of any property, plant, and equipment during the year. Its net income for the year was $5,000 and its cash dividends were $4,000. The company did not issue any bonds payable or purchase any of its own common stock during the year. Its net cash provided by operating activities and net cash used in financing activities are:
A) net cash provided by operating activities, $35,000; net cash used in financing activities,$7,000
B) net cash provided by operating activities, $33,000; net cash used in financing activities,$7,000
C) net cash provided by operating activities, $35,000; net cash used in financing activities,$1,000
D) net cash provided by operating activities, $33,000; net cash used in financing activities,$1,000
Statement of Cash Flows Using A method of preparing the statement of cash flows that reconciles net income with net cash flows from operating activities.Indirect Method
For the year ending March 31, 20Y5, Omega Systems Inc. reported net income of $105,450 and paid dividends of $7,500. Comparative balance sheets as of March 31, 20Y5 and 20Y4, are as follows:
OMEGA SYSTEMS INC. | |||||||
Balance Sheets | |||||||
March 31, | Changes Increase (Decrease) | ||||||
20Y5 | 20Y4 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash | $ 39,500 | $ 29,250 | $ 10,250 | ||||
Accounts receivable | 114,120 | 78,000 | 36,120 | ||||
Inventory | 126,550 | 117,550 | 9,000 | ||||
Estimated Returns Inventory | 6,600 | 5,000 | 1,600 | ||||
Office supplies | 4,255 | 4,435 | (180) | ||||
Prepaid insurance | 3,975 | 4,500 | (525) | ||||
Total current assets | $ 295,000 | $238,735 | $ 56,265 | ||||
Property, plant, and equipment: | |||||||
Land | $ 30,000 | $ 30,000 | $ 0 | ||||
Store equipment | 350,000 | 285,000 | 65,000 | ||||
Accumulated depreciation—store equipment | (118,550) | (93,900) | (24,650) | ||||
Office equipment | 23,355 | 15,000 | 8,355 | ||||
Accumulated depreciation—office equipment | (7,080) | (3,345) | (3,735) | ||||
Total property, plant, and equipment | $ 277,725 | $232,755 | $ 44,970 | ||||
Total assets | $ 572,725 | $471,490 | $101,235 | ||||
Liabilities | |||||||
Current liabilities: | |||||||
Accounts payable | $ 24,630 | $ 13,905 | $ 10,725 | ||||
Customer refunds payable | 9,000 | 7,500 | 1,500 | ||||
Notes payable (current portion) | 7,500 | 7,500 | 0 | ||||
Salaries payable | 1,710 | 2,250 | (540) | ||||
Unearned rent | 2,700 | 3,600 | (900) | ||||
Total current liabilities | $ 45,540 | $ 34,755 | $ 10,785 | ||||
Long-term liabilities: | |||||||
Notes payable (final payment due in eight years) | 30,000 | 37,500 | (7,500) | ||||
Total liabilities | $ 75,540 | $ 72,255 | $ 3,285 | ||||
Stockholders’ Equity | |||||||
Common stock | $ 37,500 | $ 37,500 | $ 0 | ||||
Retained earnings | 459,685 | 361,735 | 97,950 | ||||
Total stockholders’ equity | $ 497,185 | $399,235 | $ 97,950 | ||||
Total liabilities and stockholders’ equity | $ 572,725 | $471,490 | $101,235 |
Instructions:
1. Prepare a statement of cash flows, using the indirect method. Enter account decreases, cash outflows, and the income statement effects that reduce net income as negative amounts.
Omega Systems Inc. | |||
Statement of Cash Flows | |||
For the Year Ended March 31, 20Y5 Cash flows from operating activities: Net income Depreciation expense-store equipment Depreciation expense-office equipment Changes in noncash current operating assets and liabilities: Increase in accounts receivable Increase in inventory Increase in estimated returns inventory Decrease in office supplies Decrease in prepaid insurance Increase in accounts payable Increase in customer refunds payable Decrease in salaries payable Decrease in unearned rent Net cash flows used for investing activities Cash flows used for financing activities: Payment of note payable Payment of dividends Net cash flows used for financing activities Net increase in cash April 1, 20Y4 cash balance March 31, 20Y5 cash balance |
Birchett Corporation's most recent balance sheet appears below:
Comparative Balance Sheet | ||
Ending Balance | Beginning Balance | |
Assets | ||
Current assets: | ||
Cash and cash equivalents | $27 | $26 |
Accounts receivable | 65 | 59 |
Inventory | 49 | 55 |
Total current assets | 141 | 140 |
Property, plant, and equipment | 533 | 490 |
Less accumulated depreciation | 234 | 231 |
Net property, plant, and equipment | 299 | 259 |
Total assets | $440 | $399 |
Liabilities and stockholders' equity | ||
Current liabilities: | ||
Accounts payable | $28 | $26 |
Total current liabilities | 28 | 26 |
Bonds payable | 169 | 200 |
Total liabilities | 197 | 226 |
Stockholders’ equity: | ||
Common stock | 71 | 70 |
Retained earnings | 172 | 103 |
Total stockholders’ equity | 243 | 173 |
Total liabilities and stockholders' equity | $440 | $399 |
The company's net income for the year was $91 and it did not sell or retire any property, plant, and equipment during the year. Cash dividends were $22. The net cash provided by (used in) operating activities for the year was:
$5 | ||
$130 | ||
$86 | ||
$96 |