The accountant for Scott Industries prepared the following list of account balances from the company's records for the year ended December 31. Fees earned $165,000 Cash $30,000 Accounts receivable 16,000 Selling expenses 44,000 Equipment 64,000 Common stock 47,000 Accounts payable 12,000 Interest revenue 3,000 Salaries & wages expense 40,000 Income taxes expense 18,000 Income taxes payable 5,000 Rent expense 20,000 Calculate net income or net loss. Based on this information, is Scott Industries profitable?

The accountant for Scott Industries prepared the following list of account balances from the company's records for the year ended December 31. Fees earned $165,000 Cash $30,000 Accounts receivable 16,000 Selling expenses 44,000 Equipment 64,000 Common stock 47,000 Accounts payable 12,000 Interest revenue 3,000 Salaries & wages expense 40,000 Income taxes expense 18,000 Income taxes payable 5,000 Rent expense 20,000 Calculate net income or net loss. Based on this information, is Scott Industries profitable?

Financial Accounting

15th Edition

ISBN:9781337272124

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

Publisher:Carl Warren, James M. 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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Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on transactions that occurred during the year: a. Purchased supplies on credit, $18,600 b. Paid $14,800 cash toward the purchase in Transaction a c. Provided services to customers on credit1 $46,925 d. Collected $39,650 cash from accounts receivable e. Recorded depreciation expense, $8,175 f. Employee salaries accrued, $15,650 g. Paid $15,650 cash to employees for salaries earned h. Accrued interest expense on long-term debt, $1,950 i. Paid a total of $25,000 on long-term debt, which includes $1.950 interest from Transaction h j. Paid $2,220 cash for l years insurance coverage in advance k. Recognized insurance expense, $1,340, that was paid in a previous period l. Sold equipment with a book value of $7,500 for $7,500 cash m. Declared cash dividend, $12,000 n. Paid cash dividend declared in Transaction m o. Purchased new equipment for $28,300 cash. p. Issued common stock for $60,000 cash q. Used $10,700 of supplies to produce revenues Summit Sales uses the indirect method to prepare its statement of cash flows. Required: 1. Construct a table similar to the one shown at the top of the next page. Analyze each transaction and indicate its effect on the fundamental accounting equation. If the transaction increases a financial statement element, write the amount of the increase preceded by a plus sign (+) in the appropriate column. If the transaction decreases a financial statement element, write the amount of the decrease preceded by a minus sign (-) in the appropriate column. 2. Indicate whether each transaction results in a cash inflow or a cash outflow in the Effect on Cash Flows column. If the transaction has no effect on cash flow, then indicate this by placing none in the Effect on Cash Flows column. 3. For each transaction that affected cash flows, indicate whether the cash flow would be classified as a cash flow from operating activities, cash flow from investing activities, or cash flow from financing activities. If there is no effect on cash flows, indicate this as a non-cash activity.
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