EBK HORNGREN'S ACCOUNTING
12th Edition
ISBN: 8220103677684
Author: Matsumura
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 16, Problem P16A.36APGA
Preparing the statement of cash flows—direct method
Learning Objective 4 Appendix 16A
2. Total Assets $1,051,400
3. Net Cash Prov. by Op. Act. $308,500
- On January 1, 2018, BRC issued no par common stock for $475,000.
- Early in January, BRC made the following cash payments:
- For store fixtures, $53,000
- For merchandise inventory, $260,000
- For rent expense on the store building, $13,000
- Later in the year, BRC purchased merchandise inventory on account for $240,000. Before year-end, BRC paid $160,000 of this accounts payable.
- During 2018, BRC sold 2,200 units of merchandise inventory for $450 each. Before year-end, the company collected 85% of this amount. Cost of goods sold for the year was $330,000, and ending merchandise inventory totaled $170,000.
- The store employs three people. The combined annual payroll is $80,000, of which BRC still owes $4,000 at year-end
- At the end of the year, BRC paid income tax of $24,000. There are no income taxes payable.
- Late in 2018, BRC paid cash dividends of $40,000
- For store fixtures, BRC uses the
straight-line depreciation method , over five years, with zero residual value.
Requirements
- Prepare BRC's income statement for the year ended December 31, 2018. Use the single-step format, with all revenues listed together and all expenses listed together.
- Prepare BRC's
balance sheet at December 31, 2018. - Prepare BRC's statement of cash flows for the year ended December 31, 2018. Format cash flows from operating activities by the direct method.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
(Learning Objectives 1, 7: Show how to speed up cash flow from receivables;evaluate liquidity through ratios) Geneva Co., Inc., an electronics and appliance chain,reported these figures in millions of dollars:Net sales .........................................Receivables at end of year...............2019$523,1253,8602018$543,1254,510Requirements1. Compute Geneva’s days’ sales in receivables or days’ sales outstanding (DSO) during2019. (For this exercise, use “net sales” for “net credit sales” when calculating ratios.)2. Is Geneva’s DSO long or short? Kurzwel Networks takes 39 days to collect its averagelevel of receivables. Domarko Freight, the overnight shipper, takes 33 days. What causesGeneva’s collection period to be so different?
(Learning Objective 1: Show how to speed up cash from receivables) Patterson ShirtCompany sells on credit and manages its own receivables. Average experience for the past threeyears has been the following:Sales..................................................Cost of goods sold.............................Uncollectible-account expense...........Other expenses..................................Cash$250,000125,000—82,500Credit$250,000125,00018,00082,500Total$500,000250,00018,000165,000The owner of Patterson is considering whether to accept credit cards (VISA and MasterCard)instead of granting credit to customers. If Patterson were to accept credit cards, the ownerexpects total sales to increase by 10% but cash sales to remain unchanged. Further, if Pattersonwere to accept credit cards, the business can save $9,000 on other expenses, but the credit cardprocessors charge 3% on credit card sales.Requirement1. Should Patterson Shirt Company start accepting credit cards? Show the computations…
(Learning Objectives 1, 7: Show how to speed up cash flow from receivables;evaluate liquidity using ratios) The comparative financial statements of Diamond Pools, Inc.,for 2020, 2019, and 2018 included the following select data:Balance sheetCurrent assets:Cash...............................................Investment in trading securities......Receivables, net of allowancefor uncollectible accounts of $7,$6, and $4, respectivelyInventories .....................................Prepaid expenses............................Total current assets........................Total current liabilities.......................Income statementNet sales (all on account)...................(In millions)2020$ 9015027034050$ 900$ 550$7,7002019$ 9518028035540$ 950$ 640$5,3552018$ 6011523032535$ 765$ 650$4,745Requirements1. Compute the following ratios for 2020 and 2019:a. Current ratiob. Quick (acid-test) ratioc. Days’ sales outstanding2. Which ratios improved from 2019 to 2020 and which ratios deteriorated?…
Chapter 16 Solutions
EBK HORNGREN'S ACCOUNTING
Ch. 16 - Prob. 1QCCh. 16 - Prob. 2QCCh. 16 - Prob. 3QCCh. 16 - Prob. 4QCCh. 16 - Prob. 5QCCh. 16 - The Plant Assets account and Accumulated...Ch. 16 - Mountain Water Corp issued common stock of $28,000...Ch. 16 - Prob. 8QCCh. 16 - Maxwell Furniture Center had accounts receivable...Ch. 16 - Prob. 10BQC
Ch. 16 - Prob. 1RQCh. 16 - Prob. 2RQCh. 16 - Prob. 3RQCh. 16 - Prob. 4RQCh. 16 - Prob. 5RQCh. 16 - Prob. 6RQCh. 16 - Prob. 7RQCh. 16 - Prob. 8RQCh. 16 - Prob. 9RQCh. 16 - Prob. 10RQCh. 16 - Prob. 11RQCh. 16 - Prob. 12RQCh. 16 - Prob. 13RQCh. 16 - Prob. 14RQCh. 16 - Prob. 15ARQCh. 16 - Prob. 16BRQCh. 16 - Prob. S16.1SECh. 16 - S16-2 Classifying items on the statement of cash...Ch. 16 - Prob. S16.3SECh. 16 - Prob. S16.4SECh. 16 - Prob. S16.5SECh. 16 - Prob. S16.6SECh. 16 - Prob. S16.7SECh. 16 - Prob. S16.8SECh. 16 - Prob. S16.9SECh. 16 - Prob. S16.10SECh. 16 - Preparing a statement of cash flows using the...Ch. 16 - Prob. S16A.12SECh. 16 - Prob. S16A.13SECh. 16 - Prob. S16A.14SECh. 16 - Prob. S16B.15SECh. 16 - Prob. E16.16ECh. 16 - Prob. E16.17ECh. 16 - Classifying items on the indirect statement of...Ch. 16 - Prob. E16.19ECh. 16 - Prob. E16.20ECh. 16 - Preparing the statement of cash flows—indirect...Ch. 16 - Prob. E16.22ECh. 16 - E16-23 Computing the cash effect Learning...Ch. 16 - Preparing the statement of cash flows—indirect...Ch. 16 - Identifying and reporting non-cash transactions...Ch. 16 - Prob. E16.26ECh. 16 - Prob. E16A.27ECh. 16 - Prob. E16A.28ECh. 16 - Computing cash flow items—direct method Learning...Ch. 16 - Prob. E16A.30ECh. 16 - Prob. E16B.31ECh. 16 - Prob. P16.32APGACh. 16 - Prob. P16.33APGACh. 16 - Prob. P16.34APGACh. 16 - Prob. P16.35APGACh. 16 - Preparing the statement of cash flows—direct...Ch. 16 - Prob. P16A.37APGACh. 16 - Prob. P16B.38APGACh. 16 - Prob. P16.39BPGBCh. 16 - Prob. P16.40BPGBCh. 16 - Prob. P16.41BPGBCh. 16 - Prob. P16.42BPGBCh. 16 - Prob. P16A.43BPGBCh. 16 - Prob. P16A.44BPGBCh. 16 - Prob. P16B.45BPGBCh. 16 - Prob. P16.46CTCh. 16 - Prob. P16.47CPCh. 16 - Prob. 16.1TIATCCh. 16 - Decision Case 16-1 Theater by Design and Show...Ch. 16 - Ethical Issue 16-1 Moss Exports is having a bad...Ch. 16 - Prob. 16.1FSC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- P11-77. (Learning Objectives 2, 3: Prepare a balance sheet from a statement of cash flows)The December 31, 2017, balance sheet and the 2018 statement of cash flows for McFarlandCorporation follow: Requirement1. Prepare the December 31, 2018, balance sheet for McFarland.arrow_forwardIdentifying the purpose and preparing the statement of cash flows — indirect method Classic Rare Coins (CRC) was formed on January 1, 2018. Additional data for the year follow: On January 1, 2018, CRC issued no-par common stock for $525,000. Early in January, CRC made the Following cash payments: For store fixtures, $51,000 For merchandise inventory, $240,000 For rent expense on a store building, $18,000 Later in the year, CRC purchased merchandise inventory on account for $243,000. Before year-end, CRC paid $153,000 of this accounts payable. During 2018, CRC sold 2,800 units of merchandise inventory for $325 each. Before year-end, the company collected 95% of this amount. The cost of goods sold for the year was $290,000, and the ending merchandise inventory totaled $193,000. The store employs three people. The combined annual payroll is $82,000, of which CRC still owes $5„000 at year-end. At the end of the year, CRC paid an income tax of $17,000. There were no income taxes…arrow_forwardIdentifying the purpose and preparing the statement of cash flows — indirect method Classic Rare Coins (CRC) was formed on January 1, 2018. Additional data for the year follow: a. On January 1, 2018, CRC issued no par common stock for $525,000. b. Early in January, CRC made the Following cash payments: For store fixtures, $51,000 For merchandise inventory, $240,000 For rent expense on a store building, $18,000 c. Later in the year, CRC purchased merchandise inventory on account for $243,000. Before year-end, CRC paid $153,000 of this accounts payable. d. During 2018, CRC sold 2,800 units of merchandise inventory for $325 each. Before year-end, the company collected 95% of this amount. Cost of goods sold for the year was $290,000, and ending merchandise inventory totaled $193,000. e. The store employs three people. The combined annual payroll is $82,000, of which CRC still owes $5„000 at year-end. f. At the end of the year, CRC paid income tax of $17,000. There was no income taxes…arrow_forward
Recommended textbooks for you
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License