Below are the comparative Balance Sheets for ACE for 20x1 and 20x2, as well as the 20x2
Question:
Below are the comparative Balance Sheets for ACE for 20x1 and 20x2, as well as the 20x2 Income Statement. DOUBLE CHECK THE ORDER OF THE YEARS!
20x2 | 20x1 | |||
Cash | $1,800 | $1,150 | ||
Accounts Receivable (net) | 1,750 | 1,300 | ||
Inventory | 1,600 | 1,900 | ||
Total Current Assets | $5,150 | $4,350 | ||
Equipment | 1,900 | 1,700 | ||
(1,200) | (1,170) | |||
Long Term Investment (HTM) | 1,300 | 1,420 | ||
Total Assets | $7,150 | $6,300 | ||
Accounts Payable | $1,200 | $900 | ||
Accrued Liabilities (sell and admin) | 200 | 250 | ||
Income Tax Payable | 0 | 0 | ||
Total Current Liabilities | $1,400 | $1,150 | ||
Bond Payable | 1,400 | 1,550 | ||
Total Long Term Liabilities | 1,400 | 1,550 | ||
Common Stock, 20 par | 1,900 | 1,700 | ||
Retained Earnings | 2,450 | 1,900 | ||
Total Liabilities and Equity | $7,150 | $6,300 | ||
Sales Revenue | $6,900 | |||
Cost of Goods Sold | 4,700 | |||
Gross Profit | 2,200 | |||
Salaries and Administrative Exp | 930 | |||
Income from Operations | 1,270 | |||
Gain on sale of investments | 80 | |||
Net Income before Tax | 1,350 | |||
Income Tax Expense | 540 | |||
Net Income | 810 | |||
Additional Information –
1 – When necessary, you should round to whole dollars
2 – Do not be concerned with Bad Debt Expense
3 – During the year, $70 of common stock was issued in exchange for plant assets
4 – No long term investments were purchased
5 - All cash flow items can be determined from the above
REQUIRED –
- You are to prepare ACE’s SCF for 20x2. You are to prepare the Operating section under BOTH approaches.
Accounting Principles
ISBN: 978-1119048473
7th Canadian Edition Volume 2
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak