Problem 1.
The accountant for Farly Corporation prepared the following listfrom the companyâs accounting records for the year ended December31, 2014:
Sales Revenue $165,000 Cash $30,000
Accounts receivable $14,000 Selling expenses $44,000
Equipment $42,000 Common stock $17,000
Accounts Payable $12,000 Interest income $3,000
Salaries and wages expense $40,000 Cost of goods sold $51,000
Inventories $22,000 Prepaid expenses $2,000
Income taxes payable $5,000 Income taxesexpense $18,000
Notes payable $20,000 Retainedearnings ???
A.Prepare an Income Statement forFarly Corporation for Year Ended December 31, 2014.
B.Prepare a Balance Sheet for FarlyCorporation as of December 31, 2014.
C.What was the amount of Retainedearnings for Farly Corporation at the end of 2014?
Problem 2:
Hana, Inc. reported $52,000 of net income for 2013. Hanaâsbalance sheet at December 31, 2014 includes the followingaccounts:
Wages payable $1,000
Inventory $26,000
Prepaid rent $3,000
Land $40,000
Cash $15,000
Accounts receivable $22,000
Accounts payable $25,000
Capital stock $40,000
Retained earnings $29,000
Income taxes payable $11,000
A.Determine the current ratio andworking capital of Hana.
B.Beyond the information provided inyour answer to part A, what does the composition of the currentassets tell you about
Hanaâs liquidity?
C.What other information do you needto fully assess Hanaâs liquidity? Why is liquidity important?
Problem 1.
The accountant for Farly Corporation prepared the following listfrom the companyâs accounting records for the year ended December31, 2014:
Sales Revenue $165,000 Cash $30,000
Accounts receivable $14,000 Selling expenses $44,000
Equipment $42,000 Common stock $17,000
Accounts Payable $12,000 Interest income $3,000
Salaries and wages expense $40,000 Cost of goods sold $51,000
Inventories $22,000 Prepaid expenses $2,000
Income taxes payable $5,000 Income taxesexpense $18,000
Notes payable $20,000 Retainedearnings ???
A.Prepare an Income Statement forFarly Corporation for Year Ended December 31, 2014.
B.Prepare a Balance Sheet for FarlyCorporation as of December 31, 2014.
C.What was the amount of Retainedearnings for Farly Corporation at the end of 2014?
Problem 2:
Hana, Inc. reported $52,000 of net income for 2013. Hanaâsbalance sheet at December 31, 2014 includes the followingaccounts:
Wages payable $1,000
Inventory $26,000
Prepaid rent $3,000
Land $40,000
Cash $15,000
Accounts receivable $22,000
Accounts payable $25,000
Capital stock $40,000
Retained earnings $29,000
Income taxes payable $11,000
A.Determine the current ratio andworking capital of Hana.
B.Beyond the information provided inyour answer to part A, what does the composition of the currentassets tell you about
Hanaâs liquidity?
C.What other information do you needto fully assess Hanaâs liquidity? Why is liquidity important?
Related questions
Attached are the income statement and statement of stockholdersâ equity for Varney Corp for the year ended 12/31/2014 and the comparative balance sheet information at 12/31/2013 and 12/31/2014. The following additional information is provided:
During 2014 Varney purchased land and a building through a $200,000 cash purchase. There were no disposals of operating assets during 2014. The building is the only depreciable operating asset that Varney owned during 2014
During 2014, Varney issued 5,000 shares of its own common stock for $50,000
During 2014, Varney repurchased 2,000 shares of its own common stock for $18,000
The other operating expenses were paid in full during 2014
During 2014, $2,000 of dividends were paid to stockholders
An equity statement is not shown because all relevant information to the statement of cash flows has been provided
Required:
Prepare a statement of cash flows for Varney Corp. for the year ended 12/31/2014 using the âindirectâ method of presenting operating cash flows.
| Varney Corp. | |||||
| Income Statement | |||||
| Year Ended 12/31/2014 | |||||
| Revenues and Gains: | |||||
| Sales Revenue | $1,118,000 | ||||
| Expenses and Losses: | |||||
| Cost of Goods Sold | $ 614.600 | ||||
| Salaries and Wages Expense | 206,800 | ||||
| Rent Expense | 9,000 | ||||
| Depreciation Expense | 4,000 | ||||
| Other Operating Expenses | 123,180 | ||||
| Interest Expense | 2,000 | 963,580 | |||
| Net Income | $ 158,420 | ||||
| Varney Corp. | |||||
| Comparative Balance Sheet Information | |||||
| 12/31/2013 & 12/31/2014 | |||||
| Assets: | 12/31/2013 | 12/31/2014 | Change | ||
| Cash | $ 85,800 | $136,900 | $ +51,100 | ||
| Accounts Receivable | 73,500 | 115,520 | +42,020 | ||
| Inventory | 40,000 | 15,400 | - 24,600 | ||
| Prepaid Rent | 3,000 | 0 | -3,000 | ||
| Operating Assets (Net) | 0 | 196,000 | +196,000 | ||
| Total Assets | $202,300 | $463,820 | $+261,520 | ||
| Liabilities and Stockholdersâ Equity: | |||||
| Accounts Payable | $ 51,500 | $120,000 | $ +68,500 | ||
| Salaries & Wages Payable | 900 | 6,000 | + 5,100 | ||
| Interest Payable | 500 | 0 | - 500 | ||
| Notes Payable | 50,000 | 50,000 | 0 | ||
| Paid-in Capital | 75,000 | 125,000 | +50,000 | ||
| Retained Earnings | 24,400 | 180,820 | +156,420 | ||
| Treasury Stock | 0 | (18,000) | -18,000 | ||
| Total Liabilities & Stockholdersâ Equity | $202,300 | $463,820 | $+261,520 | ||
| Devin E Corporation | |||
| Balance Sheet | |||
| As of December 31, | |||
| 2015 | 2014 | ||
| Assets: | |||
| Cash & Cash Equivalents | $41,900 | $25,000 | |
| Accounts Receivable | 24,000 | 6,250 | |
| Inventory | 30,000 | 36,000 | |
| CurrentAssets | 95,900 | 67,250 | |
| Land | 25,000 | 10,000 | |
| Equipment | 42,000 | 38,500 | |
| Less: Accumulated Depreciation | (14,000) | (7,000) | |
| 53,000 | 41,500 | ||
| Total Assets | 148,900 | 108,750 | |
| Liabilities: | |||
| Accounts Payable | 17,500 | 22,500 | |
| Accrued Salaries Payable | 5,500 | 8,000 | |
| Rent Expense Payable | 2,200 | 1,000 | |
| Income Tax Payable | 6,900 | 4,000 | |
| Current Liabilities | 32,100 | 35,500 | |
| Long-term notes payable | 50,000 | 30,000 | |
| Total Liabilities | 82,100 | 65,500 | |
| Stockholders Equity: | |||
| Common Stock | 42,000 | 30,000 | |
| Retained Earnings | 24,800 | 13,250 | |
| Total Liabilities & StockholdersEquity | $148,900 | $108,750 | |
| Devin E Corporation | |||
| Income Statement | |||
| For the Year Ended December 31, 2015 | |||
| 2015 | |||
| Revenues | $147,000 | ||
| Cost of Goods Sold | 84,000 | ||
| Gross Profit | 63,000 | ||
| Operating Expenses | |||
| Depreciation Expense | 7,000 | ||
| Salary Expense | 14,600 | ||
| Insurance Expense | 2,500 | ||
| Rent Expense | 10,000 | ||
| Interest Expense | 4,200 | ||
| Total OperatingExpenses | 38,300 | ||
| Income from Operations | 24,700 | ||
| Income Tax Expense | 6,900 | ||
| Net Income | $17,800 | ||
| Devin E Corporation (theâCompanyâ) manufactures food processing equipment. Use DevinCorporationâs 2015 and 2014 balance sheets and 2015 incomestatement shown below to prepare a statement of cash flows for2015. Note that the Company paid dividends of $6,250 during2015. |
Please fill in the balance sheet as well as create a statementof cash flow sheet
| Devin E Corporation | ||||||||
| Balance Sheet | ||||||||
| 31-Dec | ||||||||
| Worksheet for Cash Flow | ||||||||
| 2015 | 2014 | Change | Cash | Operating | Investing | Financing | ||
| Cash and Cash Equivalents | ||||||||
| Accounts Receivable | ||||||||
| Inventory | ||||||||
| Land | ||||||||
| Equipment | ||||||||
| Accumulated Depreciation | ||||||||
| Accounts Payable | ||||||||
| Accrued Salaries Payable | ||||||||
| Rent Expense Payable | ||||||||
| Income Tax Payable | ||||||||
| Long-term Note Payable | ||||||||
| Common Stock | ||||||||
| Retained Earnings | ||||||||
| Devin E Corporation | ||
| Statement of Cash Flows | ||
| For the Year Ended December 31, 2015 | ||
Lansing Companyâs 2015 income statement and selected balancesheet data (for current assets and current liabilities) at December31, 2014 and 2015, follow. |
| LANSING COMPANY Income Statement For Year Ended December 31, 2015 | ||||||
| Sales revenue | $ | 62,200 | ||||
| Expenses | ||||||
| Cost of goods sold | 21,000 | |||||
| Depreciation expense | 4,500 | |||||
| Salaries expense | 10,000 | |||||
| Rent expense | 3,000 | |||||
| Insurance expense | 1,700 | |||||
| Interest expense | 1,800 | |||||
| Utilities expense | 1,500 | |||||
| Net income | $ | 18,700 | ||||
| LANSING COMPANY Selected Balance Sheet Accounts | ||||||
At December 31 | 2015 | 2014 | ||||
| Accounts receivable | $360 | $371 | ||||
| Inventory | 96 | 75 | ||||
| Accounts payable | 123 | 130 | ||||
| Salaries payable | 47 | 39 | ||||
| Utilities payable | 13 | 10 | ||||
| Prepaid insurance | 10 | 11 | ||||
| Prepaid rent | 13 | 11 | ||||
| Required: | |||||||||||||||||||||||||||||||||||
| Prepare the cash flows from operating activities section only ofthe companyâs 2015 statement of cash flows using the directmethod. (Amounts to be deducted should be indicatedwith a minus sign.)
PLEASE CALCUALATE EACH ACTIVITIES | |||||||||||||||||||||||||||||||||||
