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Accounting
Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales $1,950,000 Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,150,000 505,000 53,000 $1,708,000 $242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $15,000 (13,000) 5,000 4,000 $ 11,000 $231,000 Income before income taxes Income taxes: Current Deferred $ 79,000 11,000 90.000 Provision for income taxes

Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales $1,950,000 Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,150,000 505,000 53,000 $1,708,000 $242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $15,000 (13,000) 5,000 4,000 $ 11,000 $231,000 Income before income taxes Income taxes: Current Deferred $ 79,000 11,000 90.000 Provision for income taxes

Fundamentals of Financial Management (MindTap Course List)
Fundamentals of Financial Management (MindTap Course List)
15th Edition
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter4: Analysis Of Financial Statements
Section: Chapter Questions
Problem 24P: Income Statement for Year Ended December 31, 2018 (Millions of Dollars) Net sales 795.0 Cost of...
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Problems 21-73 Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales $1,950,000 Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,150,000 505,000 53,000 $1,708,000 $242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent 24 15,000 (13,000) 5,000 4,000 $ 11,000 $ 231,000 Income before income taxes Income taxes: Current Deferred Provision for income taxes %24 79,000 11,000 $ 90,000 $ 141,000 334,000 $ 475,000 43,000 $ 432,000 Net income Retained earnings, January 1, 2016 Cash dividends, paid August 13, 2016 Retained earnings, December 31, 2016 Additional information: On January 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for S19,000 cash. b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash. On May 14, 2016, Farrell sold all of its treasury stock for $25,000 cash. d. On June 1, 2016, Farrell paid $50,000 to retire bonds with a face value (and book value) of $50,000. On July 2, 2016, Farrell purchased equipment for $63,000 cash. f. a. c. е. On December 31, 2016, land with a fair market value of $150,000 was purchased through the issuance of a long-term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2018. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2016, based on the preceding information. 2. Prepare the statement of cash flows.
Transcribed Image Text:Problems 21-73 Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales $1,950,000 Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,150,000 505,000 53,000 $1,708,000 $242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent 24 15,000 (13,000) 5,000 4,000 $ 11,000 $ 231,000 Income before income taxes Income taxes: Current Deferred Provision for income taxes %24 79,000 11,000 $ 90,000 $ 141,000 334,000 $ 475,000 43,000 $ 432,000 Net income Retained earnings, January 1, 2016 Cash dividends, paid August 13, 2016 Retained earnings, December 31, 2016 Additional information: On January 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for S19,000 cash. b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash. On May 14, 2016, Farrell sold all of its treasury stock for $25,000 cash. d. On June 1, 2016, Farrell paid $50,000 to retire bonds with a face value (and book value) of $50,000. On July 2, 2016, Farrell purchased equipment for $63,000 cash. f. a. c. е. On December 31, 2016, land with a fair market value of $150,000 was purchased through the issuance of a long-term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2018. g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting. Required: 1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2016, based on the preceding information. 2. Prepare the statement of cash flows.
P21-13 Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, and the statement of income and retained earnings for the year ended December 31, 2016: LO 21.3 LO 21.4 LO 21.5 Balance Sheets December 31 Increase (Decrease) 2016 2015 Assets Cash Accounts receivable, net Inventories Investment in Hall Inc. at equity Land Plant and equipment Less: Accumulated depreciation Patent Total Assets $225,000 295,000 549,000 73,000 350,000 624,000 (139,000) 16,000 $1,993,000 $ 180,000 305,000 431,000 60,000 200,000 606,000 (107,000) 20,000 $1,695,000 $ 45,000 (10,000) 118,000 13,000 150,000 18,000 (32,000) (4,000) $298,000 Liabilities and Shareholders' Equity Accounts payable and accrued expenses Note payable, long-term Bonds payable Deferred taxes payable Common stock, $10 par Additional paid-in capital Retained earnings Treasury stock, at cost Total Liabilities and Shareholders' Equity $ 563,000 $ 604,000 150,000 160,000 41,000 410,000 196,000 432,000 210,000 30,000 400,000 175,000 334,000 (17,000) $1,695,000 $ 41,000 150,000 (50,000) 11,000 10,000 21,000 98,000 17,000 $298,000 $1,993,000
Transcribed Image Text:P21-13 Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, and the statement of income and retained earnings for the year ended December 31, 2016: LO 21.3 LO 21.4 LO 21.5 Balance Sheets December 31 Increase (Decrease) 2016 2015 Assets Cash Accounts receivable, net Inventories Investment in Hall Inc. at equity Land Plant and equipment Less: Accumulated depreciation Patent Total Assets $225,000 295,000 549,000 73,000 350,000 624,000 (139,000) 16,000 $1,993,000 $ 180,000 305,000 431,000 60,000 200,000 606,000 (107,000) 20,000 $1,695,000 $ 45,000 (10,000) 118,000 13,000 150,000 18,000 (32,000) (4,000) $298,000 Liabilities and Shareholders' Equity Accounts payable and accrued expenses Note payable, long-term Bonds payable Deferred taxes payable Common stock, $10 par Additional paid-in capital Retained earnings Treasury stock, at cost Total Liabilities and Shareholders' Equity $ 563,000 $ 604,000 150,000 160,000 41,000 410,000 196,000 432,000 210,000 30,000 400,000 175,000 334,000 (17,000) $1,695,000 $ 41,000 150,000 (50,000) 11,000 10,000 21,000 98,000 17,000 $298,000 $1,993,000
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