Lisa had a formidable task ahead of her; she wanted to prepare an income statement, statement...
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Lisa had a formidable task ahead of her; she wanted to prepare an income statement, statement of retained earnings and a balance sheet for the year ended or as of September 30, 2012, whichever was appropriate. In order to prepare these statements, Lisa had assembled information from the accountant, the bank and various departments within the company. She had only 50 minutes to complete the work before her meeting and so she began in a fury. Lisa noted with pride that her company had achieved sales of $487,000, of which only $103,000 had not been collected. To provide this sales level, $330,000 worth of goods had been purchased throughout the year, of which only $68,000 had not been paid for yet. At the beginning of the year, Lisa had noted that there was $82,000 worth of goods in the storeroom and she wondered how much money was invested in the inventory currently on hand. Lisa thought back to her initial decision to purchase the company and remembered that she had paid $25,000 over the book value of the company for a number of reasons. The land was listed at $60,000 and the building and equipment were listed at a cost of $80,000. While leafing through the accountant's notes, Lisa surmised that, as of September 30, 2011, accumulated depreciation on the building and equipment was $10,000. In addition, as of September 30, 2012, marketable securities totalled $60,000 and outstanding liabilities included notes payable of $67,000 and the current portion of the long-term debt of $10,000. Finally, for the fiscal year ending September 30, 2012, general and administrative expenses were $130,000 and the depreciation expense was $5,000. While trying to sort through all of the information, Lisa noted from the bank statements that the long-term portion of the mortgage loan was $113,000 and the debentures (5 per cent due 2014) were at $34,000. Lisa knew she couldn't forget about taxes; the company had incurred an income tax expense of $8,000 of which $3,000 was outstanding. In addition, Lisa wanted to satisfy her shareholders and, therefore, she paid $3,000 in dividends to the holders of the $30,000 in common stock. Finally, Lisa had made some headway; for the year ending September 30, 2012, net income after tax was $23,000, net operating profit was $31,000 and gross profit was $166,000; as of September 30, 2012, retained earnings were $81,000 and total liabilities and shareholder's equity were $406,000. One last question still plaguing Lisa was how much cash the company had as of September 30, 2012. Lisa had a formidable task ahead of her; she wanted to prepare an income statement, statement of retained earnings and a balance sheet for the year ended or as of September 30, 2012, whichever was appropriate. In order to prepare these statements, Lisa had assembled information from the accountant, the bank and various departments within the company. She had only 50 minutes to complete the work before her meeting and so she began in a fury. Lisa noted with pride that her company had achieved sales of $487,000, of which only $103,000 had not been collected. To provide this sales level, $330,000 worth of goods had been purchased throughout the year, of which only $68,000 had not been paid for yet. At the beginning of the year, Lisa had noted that there was $82,000 worth of goods in the storeroom and she wondered how much money was invested in the inventory currently on hand. Lisa thought back to her initial decision to purchase the company and remembered that she had paid $25,000 over the book value of the company for a number of reasons. The land was listed at $60,000 and the building and equipment were listed at a cost of $80,000. While leafing through the accountant's notes, Lisa surmised that, as of September 30, 2011, accumulated depreciation on the building and equipment was $10,000. In addition, as of September 30, 2012, marketable securities totalled $60,000 and outstanding liabilities included notes payable of $67,000 and the current portion of the long-term debt of $10,000. Finally, for the fiscal year ending September 30, 2012, general and administrative expenses were $130,000 and the depreciation expense was $5,000. While trying to sort through all of the information, Lisa noted from the bank statements that the long-term portion of the mortgage loan was $113,000 and the debentures (5 per cent due 2014) were at $34,000. Lisa knew she couldn't forget about taxes; the company had incurred an income tax expense of $8,000 of which $3,000 was outstanding. In addition, Lisa wanted to satisfy her shareholders and, therefore, she paid $3,000 in dividends to the holders of the $30,000 in common stock. Finally, Lisa had made some headway; for the year ending September 30, 2012, net income after tax was $23,000, net operating profit was $31,000 and gross profit was $166,000; as of September 30, 2012, retained earnings were $81,000 and total liabilities and shareholder's equity were $406,000. One last question still plaguing Lisa was how much cash the company had as of September 30, 2012. Lisa had a formidable task ahead of her; she wanted to prepare an income statement, statement of retained earnings and a balance sheet for the year ended or as of September 30, 2012, whichever was appropriate. In order to prepare these statements, Lisa had assembled information from the accountant, the bank and various departments within the company. She had only 50 minutes to complete the work before her meeting and so she began in a fury. Lisa noted with pride that her company had achieved sales of $487,000, of which only $103,000 had not been collected. To provide this sales level, $330,000 worth of goods had been purchased throughout the year, of which only $68,000 had not been paid for yet. At the beginning of the year, Lisa had noted that there was $82,000 worth of goods in the storeroom and she wondered how much money was invested in the inventory currently on hand. Lisa thought back to her initial decision to purchase the company and remembered that she had paid $25,000 over the book value of the company for a number of reasons. The land was listed at $60,000 and the building and equipment were listed at a cost of $80,000. While leafing through the accountant's notes, Lisa surmised that, as of September 30, 2011, accumulated depreciation on the building and equipment was $10,000. In addition, as of September 30, 2012, marketable securities totalled $60,000 and outstanding liabilities included notes payable of $67,000 and the current portion of the long-term debt of $10,000. Finally, for the fiscal year ending September 30, 2012, general and administrative expenses were $130,000 and the depreciation expense was $5,000. While trying to sort through all of the information, Lisa noted from the bank statements that the long-term portion of the mortgage loan was $113,000 and the debentures (5 per cent due 2014) were at $34,000. Lisa knew she couldn't forget about taxes; the company had incurred an income tax expense of $8,000 of which $3,000 was outstanding. In addition, Lisa wanted to satisfy her shareholders and, therefore, she paid $3,000 in dividends to the holders of the $30,000 in common stock. Finally, Lisa had made some headway; for the year ending September 30, 2012, net income after tax was $23,000, net operating profit was $31,000 and gross profit was $166,000; as of September 30, 2012, retained earnings were $81,000 and total liabilities and shareholder's equity were $406,000. One last question still plaguing Lisa was how much cash the company had as of September 30, 2012. Lisa had a formidable task ahead of her; she wanted to prepare an income statement, statement of retained earnings and a balance sheet for the year ended or as of September 30, 2012, whichever was appropriate. In order to prepare these statements, Lisa had assembled information from the accountant, the bank and various departments within the company. She had only 50 minutes to complete the work before her meeting and so she began in a fury. Lisa noted with pride that her company had achieved sales of $487,000, of which only $103,000 had not been collected. To provide this sales level, $330,000 worth of goods had been purchased throughout the year, of which only $68,000 had not been paid for yet. At the beginning of the year, Lisa had noted that there was $82,000 worth of goods in the storeroom and she wondered how much money was invested in the inventory currently on hand. Lisa thought back to her initial decision to purchase the company and remembered that she had paid $25,000 over the book value of the company for a number of reasons. The land was listed at $60,000 and the building and equipment were listed at a cost of $80,000. While leafing through the accountant's notes, Lisa surmised that, as of September 30, 2011, accumulated depreciation on the building and equipment was $10,000. In addition, as of September 30, 2012, marketable securities totalled $60,000 and outstanding liabilities included notes payable of $67,000 and the current portion of the long-term debt of $10,000. Finally, for the fiscal year ending September 30, 2012, general and administrative expenses were $130,000 and the depreciation expense was $5,000. While trying to sort through all of the information, Lisa noted from the bank statements that the long-term portion of the mortgage loan was $113,000 and the debentures (5 per cent due 2014) were at $34,000. Lisa knew she couldn't forget about taxes; the company had incurred an income tax expense of $8,000 of which $3,000 was outstanding. In addition, Lisa wanted to satisfy her shareholders and, therefore, she paid $3,000 in dividends to the holders of the $30,000 in common stock. Finally, Lisa had made some headway; for the year ending September 30, 2012, net income after tax was $23,000, net operating profit was $31,000 and gross profit was $166,000; as of September 30, 2012, retained earnings were $81,000 and total liabilities and shareholder's equity were $406,000. One last question still plaguing Lisa was how much cash the company had as of September 30, 2012.
Expert Answer:
Answer rating: 100% (QA)
1 Calculations Sales 487000 Cost of Goods Sold 330000 purchases 68000 unpaid purchases 82000 beginning inventory 180000 Gross Profit 487000 180000 307... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0470161012
9th Canadian Edition, Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
Posted Date:
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