Diablo Chemicals Inc. buys and sells specialty chemicals The condensed Balance Sheet of Diablo Chemicals Inc.,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Diablo Chemicals Inc. buys and sells specialty chemicals The condensed Balance Sheet of Diablo Chemicals Inc., as of December 31, 2021, is provided below: Assets Cash. Accounts Receivable Office Supplies. Inventory Equipment DIABLO CHEMICALS, INC Balance Sheet December 31, 2021 Total assets Liabilities $106,750 Accounts payable.. 12,435 Total liabilities. 1,500 28,100 33,965 Footnote to the Income statement: Total equity. Total liabilities and equity. The condensed Income Statement for the year ending December 31, 2021, is provided below: $182,750 Sales revenue. Cost of goods sold. Gross Profit Selling & Administrative expenses. Income before taxes Income tax expense Net income Equity Common stock Retained earnings.. DIABLO CHEMICALS, INC Income Statement For the Year Ended December 31, 2021 $38.400 38,400 98,000 46,350 144,350 $182,750 $77,000 (36,200) $40,800 (18,900) $21,900 (4,599) $17.301 Selling & Administrative expenses included office supplies expenses, salaries for sales and admin staff, utilities for the office building, rent for the sales office in Tacoma, and depreciation expense for office equipment. The following transactions occurred during 2022: i. ii. iii. iv. V. vi. vii. viii. ix. X. xi. On March 1, the firm signed an 8% three-year note payable for $20,000 xii. On April 1, the firm purchased $15,000 worth of office equipment for cash. The office equipment is expected to have a 5-year life and a salvage value of $5,000. On June 30, the firm prepaid rent for two years in cash $24,000. The rent was for the sales office in Tacoma Shareholders invested $75,000 in exchange for 3,000 shares of common stock. The firm purchased $17,000 worth of raw material inventory for $12,700 cash, the balance to be paid later The company incurred the following expenses (all paid in cash) during the year Salaries for sales and admin staff Utilities for office building The company paid 35,800 to its suppliers of chemicals The firm purchased office supplies for $2,100 cash. Sales for the year was $98,700, of which $27,300 was collected in cash. The company received $5,000 from its customers The company received $7,500 as prepayment (Advance from Customers) for goods to be delivered later 13,490 4,810 The company declared and paid $15,000 in dividends The following adjusting entries need to be booked on December 31, 2022: a) Refer to transaction (ii). Depreciation expense for the office equipment. Depreciation expenses for other equipment for the year amounted to $3,960. b) Refer to transaction (iii). Book the rent expense for 2022. The rent expense was for the sales office in Tacoma. c) Refer to transaction (i). Book the entry for the interest accrued on the note payable. d) Refer to transaction (xi). The warehouse reported that they had shipped on December 15, goods with the sales price of $4,500 to the customer that had prepaid e) The balances in the following inventory accounts on December 31, 2022, was: Office supplies Inventory $2,800 $9,600 Book the necessary entries f) On December 1, 2022, Diablo Chemical Inc. signed an employment contract with a new CEO for an annual salary of $20,000. The new CEO will begin working on April 1, 2023. Required: 1) Enter the appropriate Beginning Balances in the Expanded Accounting Equation 2) Examine the effect of each transaction on the expanded accounting equation. Round up/down the dollar amounts (for instance, 1,666.66 becomes 1,667, and 1,666.33 becomes 1,666) 3) Total all the columns 4) Complete the Statement of Retained Earnings in Excel 5) Complete the Statement of Cash Flows in Excel using the Direct Method 6) Comment on the difference between the Net Income and Cash Flow from Operations for the year. Suppose you are a banker at the local branch of Keystone Bank. On April 15 of 2023, Diablo Chemicals' CFO has approached you for a loan of $50,000. As a banker what questions would you ask the CFO? Would you give the loan? Why? Diablo Chemicals Inc. buys and sells specialty chemicals The condensed Balance Sheet of Diablo Chemicals Inc., as of December 31, 2021, is provided below: Assets Cash. Accounts Receivable Office Supplies. Inventory Equipment DIABLO CHEMICALS, INC Balance Sheet December 31, 2021 Total assets Liabilities $106,750 Accounts payable.. 12,435 Total liabilities. 1,500 28,100 33,965 Footnote to the Income statement: Total equity. Total liabilities and equity. The condensed Income Statement for the year ending December 31, 2021, is provided below: $182,750 Sales revenue. Cost of goods sold. Gross Profit Selling & Administrative expenses. Income before taxes Income tax expense Net income Equity Common stock Retained earnings.. DIABLO CHEMICALS, INC Income Statement For the Year Ended December 31, 2021 $38.400 38,400 98,000 46,350 144,350 $182,750 $77,000 (36,200) $40,800 (18,900) $21,900 (4,599) $17.301 Selling & Administrative expenses included office supplies expenses, salaries for sales and admin staff, utilities for the office building, rent for the sales office in Tacoma, and depreciation expense for office equipment. The following transactions occurred during 2022: i. ii. iii. iv. V. vi. vii. viii. ix. X. xi. On March 1, the firm signed an 8% three-year note payable for $20,000 xii. On April 1, the firm purchased $15,000 worth of office equipment for cash. The office equipment is expected to have a 5-year life and a salvage value of $5,000. On June 30, the firm prepaid rent for two years in cash $24,000. The rent was for the sales office in Tacoma Shareholders invested $75,000 in exchange for 3,000 shares of common stock. The firm purchased $17,000 worth of raw material inventory for $12,700 cash, the balance to be paid later The company incurred the following expenses (all paid in cash) during the year Salaries for sales and admin staff Utilities for office building The company paid 35,800 to its suppliers of chemicals The firm purchased office supplies for $2,100 cash. Sales for the year was $98,700, of which $27,300 was collected in cash. The company received $5,000 from its customers The company received $7,500 as prepayment (Advance from Customers) for goods to be delivered later 13,490 4,810 The company declared and paid $15,000 in dividends The following adjusting entries need to be booked on December 31, 2022: a) Refer to transaction (ii). Depreciation expense for the office equipment. Depreciation expenses for other equipment for the year amounted to $3,960. b) Refer to transaction (iii). Book the rent expense for 2022. The rent expense was for the sales office in Tacoma. c) Refer to transaction (i). Book the entry for the interest accrued on the note payable. d) Refer to transaction (xi). The warehouse reported that they had shipped on December 15, goods with the sales price of $4,500 to the customer that had prepaid e) The balances in the following inventory accounts on December 31, 2022, was: Office supplies Inventory $2,800 $9,600 Book the necessary entries f) On December 1, 2022, Diablo Chemical Inc. signed an employment contract with a new CEO for an annual salary of $20,000. The new CEO will begin working on April 1, 2023. Required: 1) Enter the appropriate Beginning Balances in the Expanded Accounting Equation 2) Examine the effect of each transaction on the expanded accounting equation. Round up/down the dollar amounts (for instance, 1,666.66 becomes 1,667, and 1,666.33 becomes 1,666) 3) Total all the columns 4) Complete the Statement of Retained Earnings in Excel 5) Complete the Statement of Cash Flows in Excel using the Direct Method 6) Comment on the difference between the Net Income and Cash Flow from Operations for the year. Suppose you are a banker at the local branch of Keystone Bank. On April 15 of 2023, Diablo Chemicals' CFO has approached you for a loan of $50,000. As a banker what questions would you ask the CFO? Would you give the loan? Why?
Expert Answer:
Answer rating: 100% (QA)
To provide a comprehensive answer to your request I will break down the steps and address each requirement separately Beginning Balances in the Expanded Accounting Equation The expanded accounting equ... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1285190907
8th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Posted Date:
Students also viewed these corporate finance questions
-
Bottle-Up, Inc. was organized on January 8, 2010. and made its Selection on January 24, 2010. The necessary consents to the election were filed in a timely manner. Its address is 1234 Hill Street,...
-
The comparative balance sheet for Long Company as of December 31, 2019 and 2018, is shown below, followed by the condensed income statement. INSTRUCTIONS Prepare a statement of cash flows for 2019....
-
PERILS OF CONTRACTING WITH A SCHOOL DISTRICT "I was hired by a school district as an independent contractor to complete an FBA for a student. I have provided the report to the district. The district...
-
Read and watch the video case Using Operations to Create Value at Crayola and answer the following questions. a) Identify Crayolas competitive priorities from the list in Table 1.3 of the textbook...
-
In a Rankine power system, 1.5 kg/s of steam leaves the turbine as saturated vapor at 0.51 bar. The steam is condensed to saturated liquid by passing it over the tubes of a shell-and-tube heat...
-
What is the average binding energy per nucleon for 2311Na?
-
Harbord Cruise Lines is about to add a new fleet of cruise ships. It will lease the ships, paying $50 million at the end of each year for the next 10 years. These lease payments correspond to an...
-
The following data relate to factory overhead cost for the production of 10,000 computers: If productive capacity of 100% was 15,000 hours and the total factory overhead cost budgeted at the level of...
-
using deal and grove formula, Create a matlab code to show the General relationship for thermal oxidation of silicon using dry oxidation and wet oxidation. The solid line represents the general...
-
John Wallace is an automotive enthusiast. He has over 25 years of experience as a mechanic for the dealership of a large car manufacturer in Oakville. John also gained experience doing minor body...
-
How do cross-cultural differences in communication styles and conflict resolution strategies influence team performance and decision-making processes in global organizations, and what strategies can...
-
Give three reasons why a clothing company should consider distributing direct rather than through retail.
-
Write a brief for a mobile app. Identify its purpose and target audience. Support your proposal with research evidence.
-
While the attendences of international one-day and test-match fixtures was as high as ever, the ordinary county cricket scene in England was not well supported. The profile of cricket followers was...
-
At a recent strategic planning retreat of a 40-person multispecialty group, the administrator made a presentation that focused on the coming year's plans to establish the organization's first two...
-
Explain the role of the database in direct marketing. What are the key applications for an international airline wishing to use its customer records for marketing?
-
Fix code C only #include int main() { int i; double d; char ch; char s[100]; printf("Enter integer:"); scanf("%d",&i); printf("Enter double:"); scanf("%lf",&d); printf("Enter character:");...
-
What is the order p of a B + -tree? Describe the structure of both internal and leaf nodes of a B + -tree.
-
Whirlpool manufactures and sells home appliances under various brand names. IBM develops and manufactures computer hardware and offers related technology services. Target operates a chain of general...
-
The Coca-Cola Company is a global soft drink beverage company (ticker symbol KO) that is a primary and direct competitor with PepsiCo. The data in Exhibits 12.14-12.16 (pages 943-946) include the...
-
In Problem 10.16, we projected financial statements for Walmart Stores, Inc. (Walmart) for Years +1 through +5. The data in Exhibits 12.17-12.19 (pages 948-950) include the actual amounts for 2012...
-
You are provided with the worksheet for Norman Pty Ltd for the year ended 30 June 2019. The adjustments have already been made and the worksheet begins with the adjusted trial balance. Assume all...
-
The unadjusted trial balance of Innovative Computers Pty Ltd on 30 June 2019 is presented below. The following additional information is available. 1. The inventories as of 30 June 2019 were as...
-
Basic Chemicals Ltd produces a highly flammable chemical product. The company experienced a flood on 1 April 2019 that destroyed its entire work in process inventory but did not affect the raw...
Study smarter with the SolutionInn App