Q1 The comparative balance sheets for Year 2 and Year 1 as well as the statement...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Q1 The comparative balance sheets for Year 2 and Year 1 as well as the statement of income for Year 2 are provided below for That's a Wrap: That's a Wrap Balance Sheet December 31, Year 2 and Year 1 Assets Year 2 Year 1 Cash 33,000 20,000 Accounts Receivable, less allowance for uncollectible accounts of 4,000 and 3,000 respectively 44,000 47,000 Dividends Receivable 3,000 2,000 Inventory 55,000 50,000 Long-term investment 15,000 10,000 Land 70,000 40,000 Building and equipment 225,000 250,000 accumulated depreciation (25,000) (50,000) Total Assets 420,000 369,000 Liabilities & Stockholders' Equity Liabilities Accounts payable 13,000 20,000 Salaries payable 2,000 5,000 Interest payable 4,000 2,000 Income tax payable 7,000 8,000 Notes payable 30,000 Bonds payable, less discount of 2,000 and 3,000 respectively 93,000 67,000 Stockholders' Equity Common Stock 210,000 200,000 Paid-in capital- excess of par 24,000 20,000 Retained Earnings 45,000 47,000 Treasury stock (8,000) Total Liabilities & Stockholders' Equity 420,000 369,000 That's a Wrap Balance Sheet December 31, Year 2 Sales Revenue 200,000 Cost of goods sold Gross profit 120,000 80,000 Operating Expenses Salaries expense 25,000 Depreciation expense Bad debt expense 5,000 1,000 loss on the sale of building 3,000 Operating income 46,000 Non-operating revenues/(expenses) Dividend revenue 3,000 Interest expense (8,000) Income before taxes 41,000 income tax expense 16,000 Net Income 25,000 Additional information: 1. A building that originally cost $40,000, and which was three-fourths depreciated, was sold for $7,000. 2. The common stock of Byrd Corporation was purchased for $5,000 as a long-term investment. 3. Property was acquired by issuing a 13%, seven-year, $30,000 note payable to the seller. 4. On January 1, 2021, bonds were sold at their $25,000 face value. 5. On January 19, Dux issued a 5% stock dividend (1,000 shares). The market price of the $10 par value common stock was $14 per share at that time. Required: Prepare a statement of cash flows for "That's a Wrap" using the direct method. Q1 The comparative balance sheets for Year 2 and Year 1 as well as the statement of income for Year 2 are provided below for That's a Wrap: That's a Wrap Balance Sheet December 31, Year 2 and Year 1 Assets Year 2 Year 1 Cash 33,000 20,000 Accounts Receivable, less allowance for uncollectible accounts of 4,000 and 3,000 respectively 44,000 47,000 Dividends Receivable 3,000 2,000 Inventory 55,000 50,000 Long-term investment 15,000 10,000 Land 70,000 40,000 Building and equipment 225,000 250,000 accumulated depreciation (25,000) (50,000) Total Assets 420,000 369,000 Liabilities & Stockholders' Equity Liabilities Accounts payable 13,000 20,000 Salaries payable 2,000 5,000 Interest payable 4,000 2,000 Income tax payable 7,000 8,000 Notes payable 30,000 Bonds payable, less discount of 2,000 and 3,000 respectively 93,000 67,000 Stockholders' Equity Common Stock 210,000 200,000 Paid-in capital- excess of par 24,000 20,000 Retained Earnings 45,000 47,000 Treasury stock (8,000) Total Liabilities & Stockholders' Equity 420,000 369,000 That's a Wrap Balance Sheet December 31, Year 2 Sales Revenue 200,000 Cost of goods sold Gross profit 120,000 80,000 Operating Expenses Salaries expense 25,000 Depreciation expense Bad debt expense 5,000 1,000 loss on the sale of building 3,000 Operating income 46,000 Non-operating revenues/(expenses) Dividend revenue 3,000 Interest expense (8,000) Income before taxes 41,000 income tax expense 16,000 Net Income 25,000 Additional information: 1. A building that originally cost $40,000, and which was three-fourths depreciated, was sold for $7,000. 2. The common stock of Byrd Corporation was purchased for $5,000 as a long-term investment. 3. Property was acquired by issuing a 13%, seven-year, $30,000 note payable to the seller. 4. On January 1, 2021, bonds were sold at their $25,000 face value. 5. On January 19, Dux issued a 5% stock dividend (1,000 shares). The market price of the $10 par value common stock was $14 per share at that time. Required: Prepare a statement of cash flows for "That's a Wrap" using the direct method.
Expert Answer:
Answer rating: 100% (QA)
THATS A WRAP STATEMENT USING DIRECT METHOD YEAR ENDING 31 DECEMBER Y... View the full answer
Posted Date:
Students also viewed these accounting questions
-
The comparative balance sheets for Shenandoah Corporation show the following information. Additional data related to 2008 are as follows. 1. Equipment that had cost $11,000 and was 30% depreciated at...
-
The comparative balance sheets for Goltra Company show these changes in noncash current asset accounts: accounts receivable decrease $80,000, prepaid expenses increase $28,000, and inventories...
-
The comparative balance sheets for Howell Company show these changes in noncash current asset accounts: accounts receivable decrease $80,000, prepaid expenses increase $28,000, and inventories...
-
The number of claims filed each week with Security Insurance Company has a mean of 700 and a standard deviation of 250. Calculate the probability that the number of claims this week will be: (a)...
-
What is the result or outcome of systems analysis? What happens next?
-
Erte, Inc., manufactures two models of high-pressure steam valves, the XR7 model and the ZD5 model. Data regarding the two products follow: Additional information about the company follows: a....
-
Label each of the following characteristics of a corporation as either an (A) advantage or a (D) disadvantage: a. Limited liability b. Taxation c. Regulations d. Transferability of ownership
-
Each unit of product made by Jeremy, Inc. sells for $120. The company has an annual production and sales volume of 35,000 units. Costs per unit are as follows: Direct...
-
I have the right solutions for thoses questions but i need to know how to calculate it! The bold answer is the correct one. A bank offers loans, which are granted within 24 hours. The employees in...
-
The file Problem5_9.xlsx contains passing statistics for NFL teams during the 2017 season. Using formulas that do combine INDEX and MATCH in the same cell, return the desired statistics in the range...
-
On January 2, 2020 Amber Acquisitions purchased 40,000 of the common shares of Weinstein's Nordic Italian Cuisine (WNIC) for $2,400,000. The 40,000 shares represent a 40% interest in WNIC voting...
-
The figure shows a link OA of length d m that is pinned at O and rotates with an angular velocity w rad/s, and an angular acceleration a rad/s, as shown. A cable is attached to the end A of the link,...
-
Laila has a portfolio of RM1 million and she found during this pandemic Covid, the Kuala Lumpur Composite Index (KLCI) has dropped by 10% since last March. She refers to you as to get your advised...
-
K The local supermarket is considering investing in self-checkout kiosks for its customers. The self-checkout kiosks will cost $49,500 and have no residual value. Management expects the equipment to...
-
3 For y=x6 - 4x +5x, find 5 dx y 5 = 5 y 5 dx
-
Ms. Debtovski pays 24.455 percent interest (the annual percentage rate (APR) compounded daily) for the unpaid balances on her credit card account. What is the effective interest rate paid on the...
-
Discuss the ways in which air carriers compete with each other. How have regulatory changes affected this competition?
-
A certain Christmas tree ornament is a silver sphere having a diameter of 8.50 cm. Determine an object location for which the size of the reflected image is three-fourths the size of the object. Use...
-
What happens to the oligopolists profits if entry is easy?
-
What is price leadership?
-
In an oligopoly such as the U.S. domestic airline industry, a firm such as United Airlines would a. carefully anticipate Delta, JetBlue, and Southwests likely responses before it raised or lowered...
Study smarter with the SolutionInn App