The following transactions apply to Bobâs Bike Shop for 2016,its first year of operations:
1. Acquired $35,000 cash from theissue of common stock. 2. Acquired $9,600 of merchandise from Bob Hall, the owner, who hadacquired the merchandise prior to opening the shop. Issued commonstock to Bob in exchange for the merchandise inventory.
3. Purchased $85,000 of inventoryon account. 4. Paid $2,800 for radio ads. 5. Sold inventory for $165,000cash. 6. Paid $28,000 in salary to apart-time salesperson. 7. Paid $65,000 on accounts payable(see Event 3). 8. Physically counted inventory, which indicated that $28,500 ofinventory was on hand at the end of the accounting period.
a. Record each of these transactions in general journal form usingthe periodic method.
b. Post each of the events to ledgerT-accounts.
c. Prepare an income statement, statement of changes instockholdersâ equity, balance sheet, and statement of cash flowsfor 2016.
d. Prepare the necessary closing entries at the end of 2016, andpost them to the appropriate T-accounts.
e. Prepare a post-closing trialbalance.
The following transactions apply to Bobâs Bike Shop for 2016,its first year of operations:
| 1. | Acquired $35,000 cash from theissue of common stock. | ||||||||||
| 2. | Acquired $9,600 of merchandise from Bob Hall, the owner, who hadacquired the merchandise prior to opening the shop. Issued commonstock to Bob in exchange for the merchandise inventory. | ||||||||||
| 3. | Purchased $85,000 of inventoryon account. | ||||||||||
| 4. | Paid $2,800 for radio ads. | ||||||||||
| 5. | Sold inventory for $165,000cash. | ||||||||||
| 6. | Paid $28,000 in salary to apart-time salesperson. | ||||||||||
| 7. | Paid $65,000 on accounts payable(see Event 3). | ||||||||||
| 8. | Physically counted inventory, which indicated that $28,500 ofinventory was on hand at the end of the accounting period.
|
Related questions
| The followingtransactions apply to Bobâs Bike Shop for 2016, its first year ofoperations: |
| 1. | Acquired $35,000 cash from theissue of common stock. |
| 2. | Acquired $9,600 of merchandise from Bob Hall, the owner, who hadacquired the merchandise prior to opening the shop. Issued commonstock to Bob in exchange for the merchandise inventory. |
| 3. | Purchased $85,000 of inventoryon account. |
| 4. | Paid $2,800 for radio ads. |
| 5. | Sold inventory for $165,000cash. |
| 6. | Paid $28,000 in salary to apart-time salesperson. |
| 7. | Paid $65,000 on accounts payable(see Event 3). |
| 8. | Physically counted inventory, which indicated that $28,500 ofinventory was on hand at the end of the accounting period. A. Record each transaction in general journal form using theperiodic method: record entry for issuance of common stock, recordentry for issuance of common stock in exchange for the merchandiseinventory, record entry for inventory purchased on amount, recordentry for radio ads paid, record sale of inventory for cash, recordentry for salary paid to a part time sales person, record entrycash paid for accounts payable, record adjusting entry for physicalcounted inventory on hand at the end of the accounting period. B. Post each of the events to ledger T-accounts. C. Prepare an income statement of changes in stockholdersequity, balance sheet, and statement of cash flows. D. Prepare the necessary closing entries at the end of 2016, andpost them to the appropiate T-accounts. |
E. Prepare a post-closing trial balance
| [The following informationapplies to the questions displayed below.] |
| The following trial balancepertains to Benjiâs Grocery as of January 1, 2016: |
| Account Title | Debit | Credit | ||||
| Cash | $ | 64,000 | ||||
| Accountsreceivable | 12,000 | |||||
| Merchandiseinventory | 90,000 | |||||
| Accountspayable | $ | 7,500 | ||||
| Common stock | 89,000 | |||||
| Retainedearnings | 69,500 | |||||
| Total | $ | 166,000 | $ | 166,000 | ||
| The following events occurred in2016. Assume that Benjiâs uses the periodic inventory method. |
| 1. | Purchased land for $30,000cash. | |
| 2. | Purchased merchandise on accountfor $230,000, terms 1/10 n/45. | |
| 3. | Paid freight of $2,100 cash onmerchandise purchased FOB shipping point. | |
| 4. | Returned $8,600 of defectivemerchandise purchased in Event 2. | |
| 5. | Sold merchandise for $186,000cash. | |
| 6. | Sold merchandise on account for$236,000, terms 2/10 n/30. | |
| 7. | Paid cash within the discountperiod on accounts payable due on merchandise purchased in Event2. | |
| 8. | Paid $28,500 cash for sellingexpenses. | |
| 9. | Collected $156,000 of theaccounts receivable from Event 6 within the discount period. | |
| 10. | Collected $56,000 of theaccounts receivable but not within the discount period. | |
| 11. | Paid $17,100 of other operatingexpenses. | |
| 12. | A physical count indicated that $48,300 of inventory was on handat the end of the accounting Record these transactions in a general journal. (If noentry is required for a transaction/event, select "No journal entryrequired" in the first account field.) Prepare a schedule of costs of goods sold. (Amounts tobe deducted should be indicated with minus sign.)
|
The comparative balance sheet of Del Ray Enterprises Inc. atDecember 31, 2016 and 2015, is as follows:
1 | Dec. 31, 2016 | Dec. 31, 2015 | |
2 | Assets | ||
3 | Cash | $146,600.00 | $179,800.00 |
4 | Accounts receivable (net) | 224,600.00 | 242,000.00 |
5 | Merchandise inventory | 321,600.00 | 299,200.00 |
6 | Prepaid expenses | 13,400.00 | 9,600.00 |
7 | Equipment | 655,000.00 | 537,000.00 |
8 | Accumulated depreciation-equipment | (170,800.00) | (132,200.00) |
9 | Total assets | $1,190,400.00 | $1,135,400.00 |
10 | Liabilities and Stockholdersâ Equity | ||
11 | Accounts payable (merchandise creditors) | $250,200.00 | $237,600.00 |
12 | Mortgage note payable | ââââ0.00 | 336,000.00 |
13 | Common stock, $10 par | 74,000.00 | 24,000.00 |
14 | Paid-in capital: Excess of issue price over parâcommon stock | âââ470,000.00 | 320,000.00 |
15 | Retained earnings | 396,200.00 | 217,800.00 |
16 | Total liabilities and stockholdersâ equity | $1,190,400.00 | $1,135,400.00 |
Additional data obtained from the income statement and from anexamination of the accounts in the ledger for 2016 are asfollows:
A. | Net income, $332,000 |
B. | Depreciation reported on the income statement, $83,400 |
C. | Equipment was purchased at a cost of $162,800 and fullydepreciated equipment costing $44,800 was discarded, with nosalvage realized. |
D. | The mortgage note payable was not due until 2018 but the termspermitted earlier payment without penalty. |
E. | 10,000 shares of common stock were issued at $20 for cash. |
F. | Cash dividends declared and paid, $153,600 |
Prepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities. Refer to theLabels and Amount Descriptions list provided for the exact wordingof the answer choices for text entries. Be sure to complete theheading of the statement. In the operating activities section, usethe minus sign to indicate cash outflows, decreases in cash and anet cash outflow, if required. In the investing and financingactivities section, use a minus sign only to indicate a NET cashoutflow for the section.
I have the statement of cash flows, but I need help with thespreadsheet (worksheet) for statement of cash flows.
DEL RAY ENTERPRISES INC. | |||||||||||||
Statement of Cash Flows | |||||||||||||
For the Year Ended December 31, 2016 | |||||||||||||
Cash flows from operating activities: | |||||||||||||
Net income | $ 332,000 | ||||||||||||
Adjustments to reconcile net income to net cash | |||||||||||||
flow from operating activities: | |||||||||||||
Depreciation | 83,400 | ||||||||||||
Changes in current operating assets and liabilities: | |||||||||||||
Decrease in accounts receivable | 17,400 | ||||||||||||
Increase in merchandise inventory | (22,400) | ||||||||||||
Increase in prepaid expenses | (3,800) | ||||||||||||
Increase in accounts payable | 12,600 | ||||||||||||
Net cash flow from operating activities | $ 419,200 | ||||||||||||
Cash flows from investing activities: | |||||||||||||
Less cash paid for purchase of equipment | $ (162,800) | ||||||||||||
Net cash flow used for investing activities | (162,800) | ||||||||||||
Cash flows from financing activities: | |||||||||||||
Cash received from sale of common stock | $ 200,000 | ||||||||||||
Less cash paid for dividends | (153,600) | ||||||||||||
Less cash paid to retire mortgage note payable | (336,000) | ||||||||||||
Net cash flow used for financing activities | (289,600) | ||||||||||||
Increase (decrease) in cash | $ (33,200) | ||||||||||||
Cash at the beginning of the year | 179,800 | ||||||||||||
Cash at the end of the year | $ 146,600 | ||||||||||||
DEL RAY ENTERPRISES INC. | |||||||||||||||
Spreadsheet (Work Sheet) for Statement of CashFlows | |||||||||||||||
For the Year Ended December 31, 2016 | |||||||||||||||
Balance, | Transactions | Balance, | |||||||||||||
Dec. 31, 2015 | Debit | Credit | Dec. 31, 2016 | ||||||||||||
Cash | 179,800 | 146,600 | |||||||||||||
Accounts receivable (net) | 242,000 | 224,600 | |||||||||||||
Merchandise inventory | 299,200 | 321,600 | |||||||||||||
Prepaid expenses | 9,600 | 13,400 | |||||||||||||
Equipment | 537,000 | 655,000 | |||||||||||||
Accum. depr. - equipment | (132,200) | (170,800) | |||||||||||||
Accounts payable | (237,600) | (250,200) | |||||||||||||
Mortgage note payable | (336,000) | - | |||||||||||||
Common stock, $25 par | (24,000) | (74,000) | |||||||||||||
Paid-in capital in excess of par | (320,000) | (470,000) | |||||||||||||
Retained earnings | (217,800) | (396,200) | |||||||||||||
Totals | - | - | |||||||||||||
Operating activities: | |||||||||||||||
Net income | |||||||||||||||
Depreciation | |||||||||||||||
Decrease in accounts receivable | |||||||||||||||
Increase in merchandise inventory | |||||||||||||||
Increase in prepaid expenses | |||||||||||||||
Increase in accounts payable | |||||||||||||||
Investing activities: | |||||||||||||||
Purchase of equipment | |||||||||||||||
Financing activities: | |||||||||||||||
Payment of cash dividends | |||||||||||||||
Sale of common stock | |||||||||||||||
Payment of mortgage note payable | |||||||||||||||
Net decrease in cash | |||||||||||||||
Totals | |||||||||||||||
