ACCT 1201 Chapter Notes - Chapter 3: Accounts Receivable, Accounting Period, Asset

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greenporcupine206

26 Jan 2015

School

Northeastern University

Department

Accounting

Course

ACCT 1201

Professor

Kim Jackson

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Document Summary

Ch. 3 operating decisions and the income statement : operating cycle. The time it takes for a company to pay cash to suppliers, sell goods and services to customer, and collect cash from customers: time period assumption. The long life of a company can be reported in shorter time periods. Increase in assets or settlements of liabilities from ongoing operations. Result from the sale of goods or services: operating expenses, expenditure. Cost of goods sold: what company had to give up to make the product. Depreciation expense: cost of long-term asset spread over a long term: expenses. Decreases in assets or increases in liabilities from ongoing operations incurred to generate revenues during the period. While not all cash expenditures are expenses, expenses are necessary to generate revenues: other items, investment income (investment, interest, dividend revenue, interest expense, gains (or losses) on sales of assets, income tax expense. Revenues (inflows of net assets from normal ongoing operations)

Related Questions

The following are comparative balance sheets and an income statement for Wentworth Company.

Wentworth Company

Balance Sheets

As of December 31

Assets 2013 2012

Cash $21,500 $120,000

Accounts receivable 195,000 105,000

Inventory 180,000 225,000

Long-term investments 0 60,000

_______ _________

Totals $396,500 $510,000

Liabilities and shareholdersâ equity

Accounts payable $75,000 $120,000

Operating expenses payable 24,000 15,000

Bonds payable 70,000 100,000

Common stock 125,000 125,000

Retained earnings 102,500 150,000

________ _________

Totals $396,500 $510,000

Wentworth Company

Income Statement

For the Year Ended December 31, 2013

Sales $560,000

Cost of goods sold:

Beginning Inventory $225,000

Purchases 30,000

________

Goods Available for Sale 555,000

Less: ending inventory 180,000

_________

Cost of goods sold 375,000

________

Gross Profit 185,000

Operating expenses 180,000

_________

Income from Operations 5,000

Other expenses:

Loss on sale of long-term investment (7,500)

_______

Net loss $ (2,500)

Cash dividends of $45,000 were paid in 2013.

Required:

Prepare a statement of cash flows for 2013 using the direct method.

ivorymink518

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

limebeetle28

ACCT 1201 Chapter Notes - Chapter 3: Accounts Receivable, Accounting Period, Asset

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