1. What is the difference between an accounts payable and a notes payable? Explain

2. How does goodwill arise? How is it accounted for and reported on the financial statements?

3. The following Classified Balance Sheet has numerous errors. Indicate the errors in this Balance Sheet by preparing a corrected Classified Balance Sheet with all required information.

4. Barton Company uses the indirect method of preparing the Statement of Cash Flows and reports the following comparative balance sheet information. As customary, the most recent data is in the first column.

Additional Information:

Net income for 2012 was $30,000.

No equipment was disposed of during 2012.

Required:

Prepare a Cash Flow Statement using the indirect method.

Transcribed Image Text:

Assets, Liabilities and Net Worth Building, at cost Land, appraised value Inventory, retail price Thompson Company, Inc. Trial Balance For the year ended Dec. 31, 2012 Accounts receivable Accounts payable Cash Total Assets $18,000 $9,000 $10,000 $2,500 ($3,600) $2,200 $38,100 Accumulated Depreciation Note Payable (due 2015) Wages payable Capital Stock Retained Earnings Total Liabilities Amount needed to balance Total Liab. & Net worth $4,500 $5,000 $2,100 $12,000 $3,500 $27,100 $11,000 $38,100 Inventory Equipment Accumulated depreciation Accounts payable Bonds payable (serial) Common stock Retained earnings 135,000 255,000 (40,000) $ 420,000 $ 87,000 73,000 120,000 140.000 $ 420,000 155,000 205,000 (25,000) $ 415,000 $ 110,000 80,000 110,000 115,000 $ 415,000 Assets, Liabilities and Net Worth Building, at cost Land, appraised value Inventory, retail price Thompson Company, Inc. Trial Balance For the year ended Dec. 31, 2012 Accounts receivable Accounts payable Cash Total Assets $18,000 $9,000 $10,000 $2,500 ($3,600) $2,200 $38,100 Accumulated Depreciation Note Payable (due 2015) Wages payable Capital Stock Retained Earnings Total Liabilities Amount needed to balance Total Liab. & Net worth $4,500 $5,000 $2,100 $12,000 $3,500 $27,100 $11,000 $38,100 Inventory Equipment Accumulated depreciation Accounts payable Bonds payable (serial) Common stock Retained earnings 135,000 255,000 (40,000) $ 420,000 $ 87,000 73,000 120,000 140.000 $ 420,000 155,000 205,000 (25,000) $ 415,000 $ 110,000 80,000 110,000 115,000 $ 415,000

Answer rating: 100% (QA)

1 Accounts payable are amount due to vendors for products or services purchased from them whereas no... View the full answer