ACCT 203 Chapter Notes - Chapter 2: Accounts Payable, Promissory Note, Current Liability

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byzantiumwoodchuck93

8 Sep 2017

School

George Mason University

Department

Accounting

Course

ACCT 203

Professor

Hylton

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Document Summary

Classified balance sheet - groups together similar assets and similar liabilities, using a number of standard classifications and sections. Current assets - assets that a company expects to convert to cash or use up within one year or its operating cycle, whichever is longer. Except where noted, we will assume that companies use one year to determine whether an asset or liability is current or long-term. Property, plant and equipment - assets with relatively long useful lives that are currently used in operating the business. this category includes land, buildings, equipment, delivery vehicles, and furniture. Accumulated depreciation - shows the total amount of depreciation that the company has expensed thus far in the asset"s life. Property, plant, and equipment is sometimes called . Current liabilities - obligations that the company is to pay within the next year or operating cycle, whichever is longer. (ex: accounts payable, salaries and wages payable, notes payable, interest payable, and income taxes payable)

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Hocking Corporation's comparative balance sheet appearsbelow:

Hocking Corporation Comparative Balance Sheet
	Ending Balance	Beginning Balance
Assets:
Current assets:
Cashand cash equivalents	$43,000	$31,300
Accounts receivable	24,000	32,000
Inventory	82,000	74,000
Prepaid expenses	14,400	11,200
Total current assets	163,400	148,500
Property, plant, and equipment	518,000	498,000
Lessaccumulated depreciation	259,000	224,100
Netproperty, plant, and equipment	259,000	273,900
Total assets	$422,400	$422,400
Liabilities and stockholders'equity
Current liabilities:
Accounts payable	$32,200	$21,000
Accrued liabilities	64,000	83,000
Income taxes payable	97,000	99,000
Total current liabilities	193,200	203,000
Bonds payable	112,000	97,000
Total liabilities	305,200	300,000
Stockholders' equity:
Common stock	52,000	38,000
Retained earnings	65,200	84,400
Total stockholders' equity	117,200	122,400
Total liabilities and stockholders' equity	$422,400	$422,400

The company's net income (loss) for the year was $(9,600) andits cash dividends were $9,600. It did not sell or retire anyproperty, plant, and equipment during the year. The company usesthe indirect method to determine the net cash provided by operatingactivities.

The company'snet cash provided by operating activities is:

$15,700

$31,500

$39,500

$12,300

ultramarinecod331

Statement of Cash Flows
Angela's Cleaning Consortium			Seymour-Johnson, Inc.
Comparative Balance Sheet			Income Statement
December 31, 2020 and 2019			For the Year Ended December 31, 2020
	2020	2019	Net sales	$ 386,000
ASSETS			Cost of goods sold	(212,000)
Current assets			Gross profit	174,000
Cash	$ 66,500	$ 62,000	Operating expenses
Accounts receivable	95,000	113,000	Salaries and wages expense	(66,000)
Merchandise inventory	172,000	165,000	Depreciation expense	(25,000)
Total current assets	333,500	340,000	Other operating expenses	(28,000)
Long-term investments			Income from operations	55,000
Investment in Walking Dead Co.	-	50,000	Other revenues and gains
Property, buildings, and equipment	507,000	304,000	Interest revenue	15,000
Less: Accumulated depreciation	(59,500)	(42,000)	Dividend revenue	9,700
Total assets	$ 781,000	$ 652,000	Gain on disposal of plant assets	12,000
Liabilities and Stockholders' Equity			Other expenses and losses
Current liabilities			Interest expense	(15,000)
Accounts payable	$ 144,000	$ 175,000	Income before income taxes	76,700
Accrued liabilities	17,000	47,000	Income tax expense	(14,000)
Total current assets	161,000	222,000	Net Income	$ 62,700
Long-term Liabilities
Notes payable, long-term	160,000	90,000
Totalliabilities	321,000	312,000
Stockholders' equity
Common stock	370,000	250,000
Retained earnings	140,000	90,000
Treasury stock	(50,000)	-
TotalStockholdersâ Equity	460,000	340,000
Total Liabilities & Stockholders' Equity	$ 781,000	$ 652,000

Additional Information:
A. Sold plant assets with a cost of$75,000 and accumulated depreciation of $7,500,
yielding again of disposal of plant assets of $12,000.
B. Purchased plant assets by payingcash.
C. Issued Notes Payable for Cash.
D. Sold investment in Walking Dead Coat cost (zero gain/loss).
E. Issued Common Stock for Cash.
F. Purchased Treasury Stock for Cash.

Requirements:
Prepare, in good form, a Statement of Cash Flowsusing the indirect method.

beigesardine151

Additional Information:
	A. Sold plant assets with a cost of$75,000 and accumulated depreciation of $7,500,
	yielding again of disposal of plant assets of $12,000.
	B. Purchased plant assets by payingcash.
	C. Issued Notes Payable for Cash.
	D. Sold investment in Walking Dead Coat cost (zero gain/loss).
	E. Issued Common Stock for Cash.
	F. Purchased Treasury Stock for Cash.

	Requirements:
	Prepare, in good form, a Statement of Cash Flowsusing the indirect method.

Statement of Cash Flows
Angela's Cleaning Consortium			Seymour-Johnson, Inc.
Comparative Balance Sheet			Income Statement
December 31, 2020 and 2019			For the Year Ended December 31, 2020
	2020	2019	Net sales	$ 386,000
ASSETS			Cost of goods sold	(212,000)
Current assets			Gross profit	174,000
Cash	$ 66,500	$ 62,000	Operating expenses
Accounts receivable	95,000	113,000	Salaries and wages expense	(66,000)
Merchandise inventory	172,000	165,000	Depreciation expense	(25,000)
Total current assets	333,500	340,000	Other operating expenses	(28,000)
Long-term investments			Income from operations	55,000
Investment in Walking Dead Co.	-	50,000	Other revenues and gains
Property, buildings, and equipment	507,000	304,000	Interest revenue	15,000
Less: Accumulated depreciation	(59,500)	(42,000)	Dividend revenue	9,700
Total assets	$ 781,000	$ 652,000	Gain on disposal of plant assets	12,000
Liabilities and Stockholders' Equity			Other expenses and losses
Current liabilities			Interest expense	(15,000)
Accounts payable	$ 144,000	$ 175,000	Income before income taxes	76,700
Accrued liabilities	17,000	47,000	Income tax expense	(14,000)
Total current assets	161,000	222,000	Net Income	$ 62,700
Long-term Liabilities
Notes payable, long-term	160,000	90,000
Totalliabilities	321,000	312,000
Stockholders' equity
Common stock	370,000	250,000
Retained earnings	140,000	90,000
Treasury stock	(50,000)	-
TotalStockholdersâ Equity	460,000	340,000
Total Liabilities & Stockholders' Equity	$ 781,000	$ 652,000

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ACCT 203 Chapter Notes - Chapter 2: Accounts Payable, Promissory Note, Current Liability

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