ACCT 2000 : Accounting 2000 Exam 1 Review
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| The comparative balance sheets for 2016 and 2015 and the statement of income for 2016 are given below for Wright Company. Additional information from Wright's accounting records is provided also. |
| WRIGHT COMPANY Comparative Balance Sheets December 31, 2016 and 2015 ($ in 000s) | ||||
| 2016 | 2015 | |||
| Assets | ||||
| Cash | $ | 109 | $ | 70 |
| Accounts receivable | 110 | 115 | ||
| Short-term investment | 52 | 24 | ||
| Inventory | 115 | 110 | ||
| Land | 82 | 100 | ||
| Buildings and equipment | 615 | 480 | ||
| Less: Accumulated depreciation | (163) | (115) | ||
| $ | 920 | $ | 784 | |
| Liabilities | ||||
| Accounts payable | $ | 35 | $ | 43 |
| Salaries payable | 6 | 8 | ||
| Interest payable | 7 | 5 | ||
| Income tax payable | 7 | 11 | ||
| Notes payable | 0 | 27 | ||
| Bonds payable | 234 | 180 | ||
| Shareholders' Equity | ||||
| Common stock | 355 | 280 | ||
| Paid-in capitalĆ¢ĀĀexcess of par | 161 | 140 | ||
| Retained earnings | 115 | 90 | ||
| $ | 920 | $ | 784 | |
| WRIGHT COMPANY Income Statement For Year Ended December 31, 2016 ($ in 000s) | ||||
| Revenues: | ||||
| Sales revenue | $ | 460 | ||
| Expenses: | ||||
| Cost of goods sold | $ | 210 | ||
| Salaries expense | 67 | |||
| Depreciation expense | 48 | |||
| Interest expense | 17 | |||
| Loss on sale of land | 4 | |||
| Income tax expense | 64 | 410 | ||
| Net income | $ | 50 | ||
| Additional information from the accounting records: | |
| a. | Land that originally cost $18,000 was sold for $14,000. |
| b. | The common stock of Microsoft Corporation was purchased for $28,000 as a short-term investment not classified as a cash equivalent. |
| c. | New equipment was purchased for $135,000 cash. |
| d. | A $27,000 note was paid at maturity on January 1. |
| e. | On January 1, 2016, bonds were sold at their $54,000 face value. |
| f. | Common stock ($75,000 par) was sold for $96,000. |
| g. | Net income was $50,000 and cash dividends of $25,000 were paid to shareholders. |
| Required: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prepare the statement of cash flows of Wright Company for the year ended December 31, 2016. Present cash flows from operating activities by the direct method. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands (i.e., 5,000 should be entered as 5).) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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The income statement, balance sheets, and additional informationfor Great Adventures, Inc., are provided below.
| GREAT ADVENTURES, INC. Income Statement For the Year Ended December 31, 2020 | ||
| Revenues: | ||
| Service revenue (clinic, racing,TEAM) | $ 545,000 | |
| Sales revenue (MU watches) | 120,000 | |
| Total revenues | $665,000 | |
| Expenses: | ||
| Cost of goodssold (watches) | 71,000 | |
| Operatingexpenses | 304,376 | |
| Depreciationexpense | 51,000 | |
| Interestexpense | 29,824 | |
| Income taxexpense | 57,600 | |
| Totalexpenses | 513,800 | |
| Net income | $ 151,200 | |
| GREAT ADVENTURES, INC. Balance Sheets December 31, 2020 and 2019 | |||||||||
| 2020 | 2019 | Increase (I) or Decrease (D) | |||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash | $ | 325,094 | $ | 139,000 | $ | 186,094 | (I) | ||
| Accounts receivable | 46,500 | 36,000 | 10,500 | (I) | |||||
| Inventory | 17,150 | 14,100 | 3,050 | (I) | |||||
| Other current assets | 13,150 | 11,100 | 2,050 | (I) | |||||
| Long-termassets: | |||||||||
| Land | 400,000 | 0 | 400,000 | (I) | |||||
| Buildings | 1,100,000 | 0 | 1,100,000 | (I) | |||||
| Equipment | 66,000 | 66,000 | |||||||
| Accumulated depreciation | (76,500) | (25,500) | 51,000 | (I) | |||||
| Total assets | $ | 1,891,394 | $ | 240,700 | |||||
| Liabilities andStockholders' Equity | |||||||||
| Currentliabilities: | |||||||||
| Accounts payable | $ | 12,150 | $ | 9,100 | $ | 3,050 | (I) | ||
| Interest payable | 760 | 760 | |||||||
| Income tax payable | 57,600 | 38,500 | 19,100 | (I) | |||||
| Long-termliabilities: | |||||||||
| Notes payable | 502,844 | 30,500 | 472,344 | (I) | |||||
| Stockholders'Equity: | |||||||||
| Common stock | 125,000 | 25,000 | 100,000 | (I) | |||||
| Paid-in capital | 1,105,000 | 0 | 1,105,000 | (I) | |||||
| Retained earnings | 168,040 | 136,840 | 31,200 | (I) | |||||
| Treasury stock | (80,000) | 0 | (80,000) | (I) | |||||
| Total liabilitiesand stockholdersĆ¢ĀĀ equity | $ | 1,891,394 | $ | 240,700 | |||||
Additional Information for 2020:
1. Borrowed $510,000 in January 2020. Made 12 monthly paymentsduring the year, reducing the balance of the loan by $37,656.
2. Issued common stock for $1,200,000.
3. Purchased 10,000 shares of treasury stock for $16 pershare.
4. Reissued 5,000 shares of treasury stock at $17 per share.
5. Declared and paid a cash dividend of $120,000.
Required:
Prepare the statement of cash flows for the year ended December31, 2020, using the indirect method. (List cashoutflows as negative amounts.)
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