Q 9 – The Baom Company at December 31 has cash $15,000, noncash assets $110,000, liabilities $60,000, and the following capital balances: Badriya $40,000 and Omaima $25,000. The firm is liquidated, and $90,000 in cash is received for the noncash assets. Badriya and Omaima income ratios are 60% and 40%, respectively. Instructions Prepare a schedule of cash payments

Q 9 – The Baom Company at December 31 has cash $15,000, noncash assets $110,000, liabilities $60,000, and the following capital balances: Badriya $40,000 and Omaima $25,000. The firm is liquidated, and $90,000 in cash is received for the noncash assets. Badriya and Omaima income ratios are 60% and 40%, respectively. Instructions Prepare a schedule of cash payments

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter14: Financial Statement Analysis

Section: Chapter Questions

Problem 14.7EX

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Investment reporting Teasdale Inc. manufactures and sells commercial and residential security equipment. The comparative unclassified balance sheets for December 31, Year 2 and Year 1 are provided below. Selected missing balances are shown by letters. Teasdale Inc. Balance Sheet December 31, Year 2 and Year 1 Dec. 31, Year 2 Dec. 31, Year 1 Cash 160,000 156,000 Accounts receivable (net) 11S.OOO 108,000 Available for-sale investments (at cost)Note 1 a. 91,200 Plus valuation allowance for available-for-sale investments b. 8,776 Available for-sale investments (fair value) c 99,976 Interest receivable d. Investment in Wright Co. stockNote 2 e. 69,200 Office equipment (net) 96,000 105,000 Total assets f. 5538,176 Accounts payable 91,000 72,000 Common stock 80,000 80,000 Excess of issue price over par 250,000 250,000 Retained earnings g 127,400 Unrealized gain (loss) on available for-sale investments h. 8,776 Total liabilities and stockholders' equity S i. 5538,176 Note 1. Investments are classified as available for sale. The investments at cost and fair value on December 31, Year 1, are as follows: No. of Shares Cost per Share Total Cost Total Fair Value Alvarez Inc stock 960 38,00 36,480 39,936 Hirsch Inc. stock 1,900 28,80 4,720 60,040 91,200 99,976 Note 2. The Investment in Wright Co. stack is an equity method investment representing 30% of the outstanding shares of Wright Co. The following selected investment transactions occurred during Year 2: Mar. 18. Purchased 800 shares of Richter Inc. at 40, including brokerage commission. Richter is classified as an available-for-sale security. July 12. Dividends of 12,000 art: received on the Wright Co. investment. Oct 1. Purchased 24,000 of Toon Co. 4%, 10-year bonds at 100. the bonds are classified as available for sale. The bonds pay interest on October 1 and April 1. December 31. Wright Co. reported a total net income of 80,000 for Year 2. Teasdale recorder equity earnings for its share of Wright Co. net income. 31. Accrued interest for three months on the Toon Co. bonds purchased on October 1. 31. Adjusted the available-for-sale investment portfolio to fair value, using the following fair value per-share amounts: Available for Sale Investments Fair Value Alvarez Inc. stock 41,50 per share Hirsch Inc stock 26,00 per share Richter Inc. stock 48,00 per share Toon Co. bonds 101 per 100 of face amount 31. Closed the Teasdale Inc. net income of 51,240. Teasdale Int. paid no dividends during the year. Instructions Determine the missing letters in the unclassified balance sheet. Provide appropriate supporting calculations.
Investment reporting O'Brien Industries Inc. is a hook publisher. The comparative unclassified balance sheets for December 31, Year 2 and Year 1 follow. Selected missing balances are shown by letters. Brien Industries Inc. Balance Sheet December 31, Year 2 and Year 1 Dec. 31, Year 2 Dec 31, Year 1 cash 233,000 220,000 Accounts receivable (net) 136,530 138,000 Available for sale investments (at cost)Note 1 a 103,770 Less valuation allowance for available-for-sale investments b. 2,500 Available for-sale investments (fair value) c 101,270 Interest receivable d Investment in Jolly Roger Co. stockNote 2 e. 77,000 Office equipment (net) 115,000 130,000 Total assets f. 666,270 Accounts payable 69.400 65,000 Common stock 70.000 70,000 Excess of issue price over par 225,000 225,000 Retained earnings g 308,770 Unrealized gain (loss) on available for-sale investments h. (2,500) Total liabilities and Stockholders equity i. 666,270 Note 1. Investments are classified as available for sale. The investments at cost and fair value on December 31, Year 1, are as follows: No. of Shares Cost per Share Total Cost Total Fair Value Bernard Co. stock 2,250 17 38,250 37,500 Chadwick Co. stock 1,260 52 65,520 63,770 103,770 101,270 Note 2. The investment in Jolly Roger Co. stock is an equity method investment representing 30% of the outstanding .shares of Jolly Roger Co. The following selected investment transactions occurred during Year 2: May 5. Purchased 3,080 shares of Gozar Inc. at 30 per share including brokerage commission. Gozar Inc. is classified as an available-for-sale security. Oct. 1. Purchased 40,000 of Nightline co. 6%, 10-Year bonds at 100. The bonds are classified as available for sale. The bonds pay interest on October 1 and April 1. 9. Dividends of 12,500 are received on the Jolly Roger co. investment. Dec. 31 Jolly Roger co. reported a total net income of 112,000 for year 2. O'Brien industries Inc. recorded equity earnings for its share of Jolly Roger co. net income. 31. Accrued three months of interest on the Nightline bonds. 31. Adjusted the available-for-sale investment portfolio to fair value, using the following fair value per-share amounts: Available-for-Sale Investments Fair Value Bernard Co. stock 15,40 per share Chadwick Co. stock 46,00 per share Gozar Inc. stock 32,00 per share Nightline Co. bonds 98 per 100 of face amount Dec. 31. Closed the OBrien Industries Inc. net income of 146,230. O'Brien Industries Inc. paid no dividends during the year. Instructions Determine the missing letters in the unclassified balance sheet. Provide appropriate supporting calculations.
Ethics in Action Lucas Hunter, president of Simmons Industries Inc., believes that reporting operating cash flow per share on the income statement would be a useful addition to the companys just completed financial statements. The following discussion took place between Lucas Hunter and Simmons' controller, John Jameson, in January, after the close of the fiscal year: Lucas: Ive been reviewing our financial statements for the last year. I am disappointed that our net income per share has dropped by 10% from last year. This won't look good to our shareholders. Is there anything we can do about this? John. What do you means? The past is the past, and the numbers are in. There isnt much that can be done about it Our financial statements were prepared according to generally accepted accounting principles, and I dont see much leeway for significant change at this point. Lucan No, no. Ive not suggesting that we cook the books. But look at the cash flow from operating activities on the statement of cash flows. The cash flow from operating activities has increased by 20%. This is very good newsand. I might add, useful information. The higher cash flow from operating activities will give our creditors comfort. John. Well, the cash flow from operating activities is on the statement of cash flows, so I guess users will be able to see the improved cash flow figures there Lucas: This is true, but somehow I think this information should be given a much higher profile. I don't like this information being buried in the statement of cash flows. You know as well as I do that many users will focus on the income statement Therefore. I think we ought to include an operating cash flow per share number on the face of the income statementsomeplace under the earnings per share number In this way, users will get the complete picture of our operating performance. Yes, our earnings per share dropped this year, but our cash flow from operating activities improved! And all the information is in one place where users can see and compare the figures. What do you think? John I've never really thought about it like that before I guess we could put the operating cash flow per share on the income statement, underneath the earnings per share amount. Users would really benefit from this disclosure. Thanks for the ideaI'll start working on it. Lucas: Glad to be of service. How would you interpret this situation? Is John behaving in an ethical and professional manner?
q. 19 A frim has net working capital of $509, net fixed assets of $2,336, sales of $7,000 and current liabilities of $900. How many dollars worth of sales are generate from every $1 in total assets? $3.00 $1.83 $1.53 $2.16 $2.39
Q. 8 At the beginning of the year, long-term debt of a firm is $280 and total debt is $325. At the end of the year, long term debt is $255 and total debt is $335. The interest paid is $21. What is the amount of the cash flow to creditors? $46 -$25 -$46 $25 $21
q. 10 A company has net working capital of $687. Long term debt is $4,078, total assets are $6,201, and fixed assets are $3,948. What is the amount of total liabilities? $8,026 $6,888 $4,765 $5,514 $5,644
Q 7. Prepare a 2021 balance sheet for Willis Corporation based on the following information: Cash = $129,000; Patents and copyrights = $630,000; Accounts payable = $211,000; Accounts receivable = $125,000; Tangible net fixed assets = $1,625,000; Inventory = $294,000; Notes payable = $170,000; Accumulated retained earnings = $1,274,000; Long-term debt = $847,000
q. 9 At the beginning of the year, Shinedown, Corp. had a long-term debt balance of $46,755. During the year, the company repaid a long-term loan in the amount of $12,630. The company paid $4,795 in interest during the year, and opened a new long-term loan for $11,145. How much is the ending long-term debt account of the company’s balance sheet? $53,105 $48,240 $45,270 $50,065 $6,280
K 11 Mars Corporation reported the following information for the year ended March 31, 2021 Administrative expenses $ 15,000 Cost of goods sold 60,000 Dividends paid by Mars to its shareholders 18,000 Dividends received by Mars from investments 10,000 Error calculating cost of goods sold in 2019 (increase income) 13,000 Interest earned on available-for-sale debt securities 6,000 Unrealized gain on hedging transactions 8,000 Loss on sale of debt securities 14,000 Net Sales 150,000 Retained earnings April 1, 2020 100,000 Selling expenses 12,000 Ignoring income taxes and earnings per share, prepare an Income Statement (multi-step), Statement of Comprehensive Income…
PA3. LO 7.4The following transactions occurred for Donaldson Inc. during the month of July. Jul. 1 Sold 50 items to Palm Springs Inc. and offered terms of 2/10, n/30, $4,000 on July 1, and issued invoice #12 on account number #312 Jul. 5 Sold 20 thing-a-jigs to Miami Inc. for $2,150 cash on July 5, and issued invoice #13 Jul. 8 Sold 30 what-is to Smith Mfg. for $5,000 and offered terms of 2/10, n/30; issued invoice #14 on account number #178 Jul. 9 Received payment from Palm Springs Inc. Jul. 22 Received payment from Smith Mfg. after expiration of the discount period Record the transactions for Donaldson Inc. in the proper special journal and subsidiary ledger. Record the same transactions using QuickBooks, and print the journals and subsidiary ledger. They should match.
Q 39 Question 39 Arthur Company is a construction company. In January, the company purchased an equity investment for $73,500. At year end, the investment had a fair market value of $65,000, Arthur company’s adjusting entry should include a … Select one: a. Credit (decrease) to Equity Investments – Balance Sheet account. b. Credit to Unrealized Loss Income – Income Statement c. Debit to Loss on Sale of Equity Investment – Income Statement d. Debit (increase) to Equity Investments – Balance Sheet
Chapter 7 p. 514 Problem Set A PA3 The following transactions occurred for Donaldson Inc. during the month of July. Jul. 1 Sold 50 items to Palm Springs Inc. and offered terms of 2/10, n/30, $4,000 on July 1, and issued invoice #12 on account number #312Jul. 5 Sold 20 thing-a-jigs to Miami Inc. for $2,150 cash on July 5, and issued invoice #13Jul. 8 Sold 30 what-is to Smith Mfg. for $5,000 and offered terms of 2/10, n/30; issued invoice #14 on account number #178Jul. 9 Received payment from Palm Springs Inc.Jul. 22 Received payment from Smith Mfg. after expiration of the discount period Record the transactions for Donaldson Inc. in the proper special journal and subsidiary ledger. SALES JOURNAL Page 22 Date Account Invoice No. Ref. DR Accts. Receivable CR Sales DR COGS CR Merchandise Inventory 2019 Jul. 1 Palm Springs Inc. (312) 12 ???? 2,000.00 Jul. 8 Smith Mfg (178) 14 ???? 2,500.00 Date…