A company has current assets that total $594,000, has a current ratio of 2.20, and uses the perpetual inventory method. Assume that the following transactions are then completed: (1) sold $12,200 in merchandise on short-term credit for $15,400, (2) declared but did not pay dividends of $52,000, (3) paid prepaid rent in the amount of $10,800, (4) paid previously declared dividends in the amount of $52,000, (5) collected an account receivable in the amount of $12,200, and (6) reclassified $43,000 of long-term debt as a current liability. Required: Compute the updated current ratio after each transaction, by showing the cumulative effects of the transactions in the following table. (Round your answers to 2 decimal places.) Current Ratio Transaction (1) Transaction (2) Transaction (3) Transaction (4) Transaction (5) Transaction (6)

A company has current assets that total $594,000, has a current ratio of 2.20, and uses the perpetual inventory method. Assume that the following transactions are then completed: (1) sold $12,200 in merchandise on short-term credit for $15,400, (2) declared but did not pay dividends of $52,000, (3) paid prepaid rent in the amount of $10,800, (4) paid previously declared dividends in the amount of $52,000, (5) collected an account receivable in the amount of $12,200, and (6) reclassified $43,000 of long-term debt as a current liability. Required: Compute the updated current ratio after each transaction, by showing the cumulative effects of the transactions in the following table. (Round your answers to 2 decimal places.) Current Ratio Transaction (1) Transaction (2) Transaction (3) Transaction (4) Transaction (5) Transaction (6)

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter14: Statement Of Cash Flows

Section: Chapter Questions

Problem 25BEB

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The comparative balance sheet of Prime Sports Gear, Inc., at December 31, the end of the fiscal year, is as follows: Additional data obtained from the records of Prime Sports Gear are as follows: a. Net income for 2013 was 121,610. b. Depreciation reported on income statement for 2013 was 46,500. c. Purchased 165,000 of new equipment, putting 90,000 cash down and issuing 75,000 of bonds for the balance. d. Old equipment originally costing 19,500, with accumulated depreciation of 7,950, was sold for 8,000. e. Retired 60,000 of bonds. f. Declared cash dividends of 64,000. g. Issued 1,500 shares of common stock at 27 cash per share. You have been asked to prepare a statement of cash flows for Prime Sports Gear for 2013. Review the worksheet called CASHFLOW that has been provided to assist you in preparing the statement. The worksheet has been designed so that as you make entries in columns D and F, column G will be automatically updated. For example, FORMULA1 should be entered as =B17+D17F17. Columns C and E are to be used to enter letter references for each of the debit and credit entries on the worksheet.
For the current year, Vidalia Company reported revenues of 250,000 and expenses of 225,000. At the beginning of the year, its retained earnings had a balance of 95,000. During the year, Vidalia paid 11,000 dividends to shareholders. Its contributed capital was 56,000 at the beginning of the year, and it did not issue any new stock during the year. Vidalias assets total 237,500 on December 31 of the current year. What are Vidalias total liabilities on December 31 of the current year?
The comparative balance sheet of Prime Sports Gear, Inc., at December 31, the end of the fiscal year, is as follows: Additional data obtained from the records of Prime Sports Gear are as follows: a. Net income for 2013 was 121,610. b. Depreciation reported on income statement for 2013 was 46,500. c. Purchased 165,000 of new equipment, putting 90,000 cash down and issuing 75,000 of bonds for the balance. d. Old equipment originally costing 19,500, with accumulated depreciation of 7,950, was sold for 8,000. e. Retired 60,000 of bonds. f. Declared cash dividends of 64,000. g. Issued 1,500 shares of common stock at 27 cash per share. Open the file CASHFLOW from the website for this book at cengagebrain.com. First, enter the formulas. Then, complete the worksheet in the manner described next. According to the problem, cash increased from 39,600 to 67,210 during the year. This is a 27,610 increase. To record this increase on the worksheet, move to row 17. Since this is the first account you are analyzing, enter the letter a in column C. Then enter 27610 in column D (a debit since cash increased). This brings the year-end balance (column G) to 67,210, its proper balance. Now move to the bottom part of the statement where you see the categories Operating Activities, Investing Activities, and so on. The credit side of the entry has to be entered here. The proper space for this cash entry is on row 59. Enter the letter a in cell E59 and 27610 in cell F59. Notice the totals at the bottom of the page (row 60) now agree. The next account balance that changed is accounts receivable. It increased by 9,035. To enter this change on the worksheet, enter the letter b in cell C18 and 9035 in cell D18 (again, a debit since accounts receivable increased). This brings the year-end balance in column G to 121,250, its proper balance. The change in accounts receivable balance is an operating activity adjustment (as explained in your textbook). Enter the credit side of this entry in cells E34 and F34, and enter the explanation Increase in accounts receivable in cell A34. Note: Your textbook probably shows Net income as the first item under Operating Activities. We will get to that later. The sequence in which you enter items on this worksheet is not important. All other balance sheet accounts must be analyzed in the same manner, placing appropriate debit or credit entries in the top part of the worksheet to obtain the proper balances in column G, and then entering the second side of the entry in the appropriate row on the bottom part of the worksheet. You should use letter references to identify all entries. Also, you must enter a description of the entry in column A under the appropriate activity category. Although a sequence of analyzing the balance sheet from top to bottom is suggested here, this order is not necessary. As mentioned earlier, your textbook may specify a different sequence. Also, note that some accounts may have both debit and credit adjustments to them. The worksheet is not a substitute for a statement of cash flows, but it does provide you with all the numbers you need to properly prepare one. You will be done with your analysis when: a. The individual account balances at December 31, 2013, as shown on the worksheet (column G) equal those shown in the given problem data. b. The transaction column totals are equal (cells D60 and F60). c. The sum of the operating, investing, and financing activities (cell G59) equals the change in cash (cell D59 or F59). When you are finished, enter your name in cell A1. Save your completed file as CASHFLOW2. Print the worksheet when done. Also print your formulas. Check figure: Total credits at 12/31/2013 (cell G31), 860,460.
Consider the following situations and determine (1) which type of liability should be recognized (specific account), and (2) how much should be recognized in the current period (year). A. A business depreciates a building with a book value of $12,000, using straight-line depreciation, no salvage value, and a remaining useful life of six years. B. An organization has a line of credit with a supplier. The company purchases $35,500 worth of inventory on credit. Terms of purchase are 3/20, n/60. C. An employee earns $1,000 in pay and the employer withholds $46 for federal income tax. D. A customer pays $4,000 in advance for legal services. The lawyer has previously recognized 30% of the services as revenue. The remainder is outstanding.
Assume that as of January 1, 20Y8, Sylvester Con- suiting has total assets of $500,000 and total assets of $150,000. As of December 31, 20Y8, Sylvester has total liabilities of $200,000 and total stockholders’ equity of $400,000. (a) What was Sylvester’s stockholders’ equity as of January 1, 20Y8? (b) Assume that Sylvester did not pay any dividends during 20Y8. What was the amount of net income for 20Y8?
Dambra Inc. provided the following information from its current-year trial balance. Account Debit Credit Loss on disposal of plant assets $720 Dividends 810 Cost of goods sold 530,400 Selling expenses 69,450 Dividend income $68 Advertising expense 42,550 Office salaries expense 5,720 Depreciation expense 99,680 Loss on asset impairment 3,040 Accounting and legal fees 16,310 Interest income 1,000 Unrealized loss on available-for-sale bonds before tax 400 Interest expense 1,150 Sales 745,000 Retained earnings: beginning balance 384,200 Accumulated other comprehensive loss: beginning balance 5,200 Common stock—no par: beginning balance 89,100 Dambra issued $4,900 of no-par common stock on April 1 of the current year. Requirement Begin by completing Dambra's single-step income statement…
The trial balance of Plano Company included the following accounts as of December 31, 2024: Debits Credits Sales revenue $ 622,000 Interest revenue 76,000 Gain on sale of investments 126,000 Cost of goods sold $ 440,000 Selling expense 134,000 Interest expense 24,000 General and administrative expenses 88,000 Plano had 50,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective tax rate is 25%. Required: Prepare a single-step income statement with earnings per share disclosure. Note: Round earnings per share answer to 2 decimal places.
The trial balance of Lakewood Incorporated included the following accounts as of December 31, 2024: Debits Credits Sales revenue $ 1,350,000 Interest revenue 71,000 Gain on sale of investments 41,000 Cost of goods sold $ 740,000 Selling expense 175,000 Loss on inventory write-down 21,000 Interest expense 31,000 General and administrative expense 141,000 Lakewood Incorporated had 100,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective tax rate is 25%. Required: Prepare a single-step income statement Prepare a multiple-step income statement
A Company that was to be liquidated had the following liabilities: Income Taxes 10,000 Notes Payable secured by land 100,000 Accounts Payable 251,050 Salaries Payable 12,950 Administrative expenses or liquidation 20,000 The Company had the following assets: Book Value Fair Value Current assets 100,000 95,000 Land 50,000 75,000 Building 150,000 200,000 QUESTION: Determine the total payment to unsecured creditors.
BSO, Inc. has current assets of $1,000,000 and current liabilities of $500,000, resulting in a current ratio of 2.0. For each of the following transactions, determine whether the current ratio willincrease, decrease, or remain the same. Consider each item, ( a )-( d ), independent of the others.a. Purchased $20,000 of supplies on credit.b. Paid Accounts Payable in the amount of $50,000.c. Recorded $100,000 of cash contributed by a stockholder for common stock.d. Borrowed $250,000 from a local bank, to be repaid in 90 days.
BSO, Inc., has assets of $600,000 and liabilities of $450,000, resulting in a debt-to-assets ratioof 0.75. For each of the following transactions, determine whether the debt-to-assets ratio willincrease, decrease, or remain the same. Each item is independent.a. Purchased $20,000 of new inventory on credit.b. Paid accounts payable in the amount of $50,000.c. Recorded accrued salaries in the amount of $100,000.d. Borrowed $250,000 from a local bank, to be repaid in 90 days.
Swish Ltd has the following results for the year ended 31 March 2020. £ Net loss per Accounts (Note (1)) (116,500) Interest receivable 3,500 Chargeable gain 44,500 Notes (1) Net loss is after charging: £ Depreciation 10,800 Entertaining customers 1,200 (2) All other expenses are allowable for corporation tax. (3) The written down value of plant and machinery on the main pool at 1 April 2019 was £20,000. There were no purchases or sales during the year ended 31 March 2020. (4) Swish Ltd has…