Assignment: Chapter 2 homework 1. eBook Show Me HowShow Me HowShow Me HowShow Me HowShow Me HowShow Me How Missing Income Statement Amounts For each of the following cases, fill in the blank with the appropriate dollar amount. Sara's Coffee Shop Amy's Deli Jane's Bagels Net sales $32,400 $ _________________ $71,300 Cost of goods sold _________________ 23,000 _________________ Gross profit 6,500 35,300 _________________ Selling expenses 2,800 _________________ 8,200 General and administrative expenses 1,400 5,600 _________________ Total operating expenses _________________ 17,200 14,600 Net income $2,300 $18,100 $21,000 2. eBook Statement of Retained Earnings Landon Corporation was organized on January 2, 2012, with the investment of $100,000 by each of its two stockholders. Net income for its first year of business was $87,220. Net income increased during 2013 to $127,340 and to $148,990 during 2014. Landon paid $21,000 in dividends to each of the two stockholders in each of the three years. Required: Prepare a statement of retained earnings for the year ended December 31, 2014. Landon Corporation Statement of Retained Earnings For the Year Ended December 31, 2014 $ $ 3. eBook Financial Statement Classification Potential stockholders and lenders are interested in a company's financial statements. Identify the statement balance sheet, income statement, or retained earnings statementon which each of the following items would appear. Note that some items may be related to more than one financial statement. Accounts Financial Statement 1. Accounts payable _________________ 2. Accounts receivable _________________ 3. Advertising expense _________________ 4. Bad debt expense _________________ 5. Bonds payable _________________ 6. Buildings _________________ 7. Cash _________________ 8. Common stock _________________ 9. Depreciation expense _________________ 10. Dividends _________________ 11. Land held for future expansion _________________ 12. Loan payable _________________ 13. Office supplies _________________ 14. Patent _________________ 15. Patent amortization expense _________________ 16. Prepaid insurance _________________ 17. Retained earnings _________________ 18. Sales _________________ 19. Utilities expense _________________ 20. Wages payable _________________ 4. eBook Classified Balance Sheet The following balance sheet items, listed in alphabetical order, are available from the records of Ruth Corporation at December 31, 2014: Accounts payable $17,940 Income taxes payable $5,885 Accounts receivable 21,920 Interest payable 1,545 Accumulated depreciation - automobiles 24,630 Inventory 42,190 Accumulated depreciation - buildings 36,160 Land 275,000 Automobiles 123,150 Long-term investments 87,845 Bonds payable, due December 31, 2018 159,000 Notes payable, due June 30, 2015 10,000 Buildings 180,800 Office supplies 2,195 Capital stock, $10 par value 148,000 Paid-in capital in excess of par value 55,000 Cash 13,690 Patents 38,000 Prepaid rent 1,580 Retained earnings 323,860 Salaries and wages payable 4,350 Required: 1. Prepare in good form a classified balance sheet as of December 31, 2014. Ruth Corporation Balance Sheet December 31, 2014 Assets Current assets: $ Total current assets $ Property, plant, and equipment: $ $ $ Total property, plant, and equipment Intangible assets: Total assets $ Liabilities Current liabilities: $ Total current liabilities $ Long-term debt: Total liabilities $ Stockholders' Equity Contributed capital: $ Total contributed capital $ Total stockholders' equity Total liabilities and stockholders' equity $ 2. Compute Ruth's current ratio. Round your answer to two decimal places. _________________ to 1 3. On the basis of your answer to (2), does Ruth appear to be liquid? _________________ 5. eBook Multiple-Step Income Statement and Profit Margin The following income statement items, arranged in alphabetical order, are taken from the records of Shaw Corporation for the current year: Advertising expense $1,380 Interest expense $1,273 Commissions expense 2,592 Interest revenue 1,374 Cost of goods sold 29,251 Rent revenue 6,810 Depreciation expense - office building 2,944 Salaries and wages expenseoffice 11,411 Income tax expense 1,554 Sales revenue 48,216 Insurance expense - salespersons auto 2,151 Supplies expenseoffice 825 Required: Assume that Shaw Corporation classifies all operating expenses into two categories: (1) selling and (2) general and administrative. 1. Prepare a multiple-step income statement for the current year. Shaw Corporation Income Statement For the Current Year $ $ Operating expenses: Selling expenses: $ Total selling expenses $ General and administrative expenses: $ Total general and administrative expenses Total operating expenses $ Other revenues and expenses: $ Excess of other revenues over other expenses $ $ 2. Compute Shaw's profit margin. Round your answer to one decimal place. _________________ % 6. eBook Statement of Cash Flows Colorado Corporation was organized at the beginning of the year, with the investment of $250,000 in cash by its stockholders. The company immediately purchased an office building for $300,000, paying $210,000 in cash and signing a three-year promissory note for the balance. Colorado signed a five-year, $60,000 promissory note at a local bank during the year and received cash in the same amount. During its first year, Colorado collected $93,970 from its customers. It paid $65,600 for inventory, $20,400 in salaries and wages, and another $3,100 in taxes. Colorado paid $5,600 in cash dividends. Required: Prepare a statement of cash flows for the year. If your answer is zero, enter "0". Use the minus sign to indicate cash out flows, a decrease in cash or cash payments. Colorado Corporation Statement of Cash Flows For the First Year Cash flows from operating activities: $ Net cash provided by operating activities $ Cash flows from investing activities: Cash flows from financing activities: $ Net cash provided by financing activities $ Cash at beginning of year Cash at end of year $