ACIS 2115 Chapter Notes - Chapter 2.1: Accounts Payable, Promissory Note, Current Liability
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The balance sheet for Plasma Screens Corporation, along with additional information, are provided below:
PLASMA SCREENS CORPORATION Balance Sheets December 31, 2018 and 2017 | ||||
2018 | 2017 | |||
Assets: | ||||
Current assets: | ||||
Cash | $ | 142,950 | $ | 154,000 |
Accounts receivable | 76,800 | 90,500 | ||
Inventory | 92,000 | 77,300 | ||
Prepaid rent | 3,400 | 1,700 | ||
Long-term assets: | ||||
Land | 465,000 | 465,000 | ||
Equipment | 762,000 | 655,000 | ||
Accumulated depreciation | (421,000) | (262,000) | ||
Total assets | $ | 1,121,150 | $ | 1,181,500 |
Liabilities and Stockholders' Equity: | ||||
Current liabilities: | ||||
Accounts payable | $ | 96,000 | $ | 82,300 |
Interest payable | 6,750 | 13,500 | ||
Income tax payable | 7,400 | 4,700 | ||
Long-term liabilities: | ||||
Notes payable | 112,500 | 225,000 | ||
Stockholders' equity: | ||||
Common stock | 685,000 | 685,000 | ||
Retained earnings | 213,500 | 171,000 | ||
Total liabilities and stockholders' equity | $ | 1,121,150 | $ | 1,181,500 |
Additional Information for 2018:
1. Net income is $66,000.
2. The company purchases $107,000 in equipment.
3. Depreciation expense is $159,000.
4. The company repays $112,500 in notes payable.
5 .The company declares and pays a cash dividend of $23,500.
Required:
Prepare the statement of cash flows using the indirect method.
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The balance sheet for Plasma Screens Corporation along with additional information, are provided below:
PLASMA SCREENS CORPORATION Balance Sheets December 31, 2018 and 2017 | ||||
2018 | 2017 | |||
Assets: | ||||
Current assets: | ||||
Cash | $ | 82,000 | $ | 120,000 |
Accounts receivable | 72,000 | 96,000 | ||
Inventory | 65,000 | 80,000 | ||
Prepaid rent | 5,000 | 4,000 | ||
Long-term assets: | ||||
Land | 500,000 | 500,000 | ||
Equipment | 800,000 | 600,000 | ||
Accumulated depreciation | (380,000) | (300,000) | ||
Total assets | $ | 1,144,000 | $ | 1,100,000 |
Liabilities and Stockholders' Equity: | ||||
Current liabilities: | ||||
Accounts payable | $ | 78,000 | $ | 82,000 |
Interest payable | 5,000 | 9,000 | ||
Income tax payable | 9,000 | 7,000 | ||
Long-term liabilities: | ||||
Notes payable | 75,000 | 150,000 | ||
Stockholders' equity: | ||||
Common stock | 600,000 | 600,000 | ||
Retained earnings | 377,000 | 252,000 | ||
Total liabilities and stockholders' equity | $ | 1,144,000 | $ | 1,100,000 |
Additional Information for 2018:
1. Net income is $160,000.
2. The company purchases $200,000 in equipment.
3. Depreciation expense is $80,000.
4. The company repays $75,000 in notes payable.
5. The company declares and pays a cash dividend of $35,000.
Prepare the statement of cash flows using the indirect method.
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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. |