ACCT 2001 Chapter Notes - Chapter 2: General Ledger, Accounting Equation, Dollar Sign

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ACCT 2001 Full Course Notes

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Balance sheet: building a balance sheet from business activities, financing. To start a company, one must obtain financing. Two sources of financing: equity: obtained from owner"s contributions and reinvestment of profit, debt: obtained through loans, accounting through the lense of three important features of business, documents a business"s activities. Company receives and gives: exchange to earn profit or to obtain resources, create value through exchange. Cost principle: assets and liabilities should be initially recorded at their original cost to the company: transactions and other activities, transactions. Business activities that affect the accounting equation: two types of events. External exchanges: exchanges involved assets, liabilities, and/or stockholders" equity between the company and someone else. Accounts increase on the same side as they appear in a = l + se: asset increases on the left side of the account, liability and stockholders" equity increase on the right side of the account. Left is debit (dr) and right is credit (cr)

Related Questions

1.Accounting standards in the United States have been developedby all except: Select one: a. American Institute of CPAs b.Financial Accounting Standards board c. Independent AccountingCorporation d. Securities and Exchange Commission (SEC) e. InternalRevenue Service (IRs)

2.accounting Standards and concepts used in preparation offinancial statements include all except: Select one: a. usage andcontribution b. historical costs c. conservatism d. consistency e.comparability

Financial statements include the following concepts except:

Select one:

a. assets

b. liabilities

c. own

e. pro bono activity

d. financial position

The income statement shows all except:

Select one:

a. revenue

b. expenses

c. net income

d. cash flows

e. net loss

Assets on the balance sheet include all except:

Select one:

a. cash

b. accounts receivable

c. specialized personnel

d. office supplies

e. office equipment

Statement of cash flows and cash flows analysis answers allexcept:

Select one:

a. is the company growing

b. will the company be able to meet its financialobligations

c. where did the company obtain its funds

d. what use was made of net income

e. who benefited from excess profits

The statement of cash flows classifies all except:

Select one:

a. cash receipts

b. cash payments into illegal activities

c. cash payments into operating activities

d. cash payments into investing activities

e. cash payments into financing activitie

e. pro bono activity

copperelephant293

Effect of product versus period costs on financial statements HoenManufacturing Company experienced the following accounting eventsduring its first year of operation. With the exception of theadjusting entries for depreciation, all transactions are cashtransactions.
1. Acquired $ 50,000 cash by issuing common stock.
2. Paid $ 8,000 for the materials used to make products, all ofwhich were started and completed during the year.
3. Paid salaries of $ 4,400 to selling and administrativeemployees.
4. Paid wages of $ 7,000 to production workers.
5. Paid $ 9,600 for furniture used in selling and administrativeoffices. The furniture was acquired on January 1. It had a $ 1,600estimated salvage value and a four- year useful life.
6. Paid $ 13,000 for manufacturing equipment. The equipment wasacquired on January 1. It had a $ 1,000 estimated salvage value anda three- year useful life.
7. Sold inventory to customers for $ 25,000 that had cost $ 14,000to make.
Required Explain how these events would affect the balance sheet,income statement, and statement of cash flows by recording them ina horizontal financial statements model as indicated here. Thefirst event is recorded as an example. In the Cash Flow column,indicate whether the amounts represent financing activities ( FA),investing activities ( IA), or operating activities ( OA).

ultramarinehamster900

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

erinduck149

ACCT 2001 Chapter Notes - Chapter 2: General Ledger, Accounting Equation, Dollar Sign

ACCT 2001 Full Course Notes

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