Thai Company was formed on January 1, 20X1. The company's accountant prepared the following incomestatement, statement of retained earnings, and balance sheet at the conclusion of the first full year ofoperations. Mr. Thai desires for the company to declare and pay a dividend equivalent to the company'snet income for the year.THAI COMPANYIncome StatementFor the Year Ending December 31, 20XIRevenuesServices to customers105,000ExpensesWages45,000Rent18.0003.000Net income42,000Thai companyStatement of Retained EarningsFor the Year Ending December 31, 20x1Beginning retained earningsPlus: Net income42.00042,000Less: DividendsEnding retained earnings42.000THAI companyBalance SheetDecember 31, 20XAssetsCash6.000Accounts receivable22.500Equipment75.000Total assets103.500LiabilitiesRent payable1,500Notes payable45.000Total lablities46.500Stockhelders'equityCapital stock15,000Retained earnings42.000Total stockholders equity57,000Jotal liabilities and ocuity103.500a) Is the company currently able to declare and pay the dividend? Why or why not?b) Explain why net income can differ from cash provided by operations.c) In addition to operating activities, what other "categories" of business activity can generatear expend cash? Provide examples for cach category.

a) Yes company is able to declare and pay dividends as the company earns a net income of $42,000.…

Sheet December 31, 20X1 Assets Cash 6.000 Accounts recevable 22.500 Equipment 75.000 Total assets 103.500 Liabilities Rent payable 1,500 Notes payable 45,000 Total ablites 46.500 Stockhelders' equity Capital stock 15,000 Retained earnings 42,000 Total stockholders' equty $7.000 Total liablities and equity 10R.500 a) Is the company currently able to declare and pay the dividend? Why or why not? b) Explain why net income can differ from cash provided by operations. e) In addition to operating activities, what other "categories" of business activity can generate or expend cach? Provide examples for each category.

Sheet December 31, 20X1 Assets Cash 6.000 Accounts recevable 22.500 Equipment 75.000 Total assets 103.500 Liabilities Rent payable 1,500 Notes payable 45,000 Total ablites 46.500 Stockhelders' equity Capital stock 15,000 Retained earnings 42,000 Total stockholders' equty $7.000 Total liablities and equity 10R.500 a) Is the company currently able to declare and pay the dividend? Why or why not? b) Explain why net income can differ from cash provided by operations. e) In addition to operating activities, what other "categories" of business activity can generate or expend cach? Provide examples for each category.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter4: Completing The Accounting Cycle

Section: Chapter Questions

Problem 7E: FedEx Corporation had the following revenue and expense account balances (in millions) for a recent...

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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?
Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Refer to the information for Juroe Company on the previous page. Also, assume that Juroes total assets at the beginning of last year equaled 17,350,000 and that the tax rate applicable to Juroe is 40%. Required: Note: Round answers to two decimal places. 1. Calculate the average total assets. 2. Calculate the return on assets.
You are the accountant for Kamal Fabricating, Inc. and you oversee the preparation of financial statements for the year just ended 6/30/2020. You have the following information from the companys general ledger and other financial reports (all balances are end-of-year except for those noted otherwise: Prepare the companys Statement of Retained Earnings.
Income Statement and Retained Earnings Huff Company presents the following items derived from its December 31, 2019, adjusted trial balance: The following information is also available for 2019 and is not reflected in the preceding accounts: 1. The common stock has been outstanding all year. A cash dividend of 1.28 per share was declared and paid. 2. Land was sold at a pretax gain of 6,300. 3. Division X (a major component of the company) was sold at a pretax gain of 4,700. It had incurred a 9,500 pretax operating loss during 2019. 4. A tornado, which is an unusual event in the area, caused a 5,400 pretax loss. 5. The income tax rate on all items of income is 30%. 6. The average shareholders equity is 90,000. Required: 1. Prepare a 2019 multiple-step income statement for Huff. 2. Prepare a 2019 retained earnings statement. 3. Compute the 2019 return on common equity (Net Income 4 Average Shareholders Equity).
Using the January 1 and December 31, 20Y8, data given in Question 10, answer the following question: If Sylvester Consulting paid $18,000 of dividends during 20Y8, what was the amount of net income for 20Y8?
FedEx Corporation had the following revenue and expense account balances (in millions) for a recent year ending May 31: a.Prepare an income statement. b.Compare your income statement with the income statement that is available at the FedEx Corporation Web site, (http://investors.fedex.com). Click on Annual Report and Download Annual Report. What similarities and differences do you see?
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