FINANCIAL ACCT.:TOOLS...(LL)-W/ACCESS
8th Edition
ISBN: 9781119250913
Author: Kimmel
Publisher: WILEY
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Question
Chapter 2, Problem 2.5E
To determine
Classified balance sheet: The main elements of balance sheet assets, liabilities, and stockholders’ equity are categorized or classified further into sections in a classified balance sheet. Assets are further classified as current assets, long-term investments, property, plant, and equipment (PPE), and intangible assets. Liabilities are classified into two sections current and long-term. Stockholders’ equity comprises of common stock and
To prepare: Classified balance sheet for Corporation L as at December 31, 2017
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These items are taken from the financial statements of Oliver Co. at December 31, 2018.
Buildings
$105,800
Accounts receivable
12,600
Prepaid insurance
3,200
Cash
11,900
Equipment
82,400
Land
61,200
Insurance expense
780
Depreciation expense
5,300
Interest expense
2,600
Common stock
60,000
Retained earnings (January 1, 2017)
40,000
Accumulated depreciation—buildings
45,700
Accounts payable
9,380
Notes payable
93,600
Accumulated depreciation—equipment
18,800
Interest payable
3,600
Service revenue
14,700
Instructions
Prepare a classified balance sheet. Assume that $12,600 of the note payable will be paid in 2019.OLIVER COMPANY
Sage Hill Inc. had the following balance sheet at December 31, 2016.
SAGE HILL INC.BALANCE SHEETDECEMBER 31, 2016
Cash
$9,600
Accounts payable
$14,500
Accounts receivable
14,000
Bonds payable
8,800
Investments
15,500
Common stock
36,900
Plant assets (net)
35,500
Retained earnings
32,300
Land
17,900
$92,500
$92,500
During 2017, the following occurred.
1.
Net income was $23,700.
2.
Depreciation expense was $8,100.
3.
Sage Hill liquidated its investment portfolio (comprised of available-for-sale investments), realizing a $3,200 loss.
4.
Sage Hill issued $20,800 of common stock at par.
5.
Dividends of $8,200 were declared and paid to stockholders.
6.
Accounts receivable and accounts payable at December 31, 2017 were $15,800 and $13,900, respectively.
7.
Sage Hill obtained $8,200in plant assets in exchange for issuing bonds.
8.
Sage Hill purchased additional plant assets for $17,900.
9.…
The following balances were taken from the books of Schimank Corp. on December 31, 2014.
Interest revenue $1,20,400 Accumulated depreciation-equipment $56,000
Cash 71,400 Accumulated depreciation-building 39,200
Sales 19,32,000 Notes receivable 2,17,000
Accounts receivable 2,10,000 Selling expenses 2,71,600
Prepaid insurance 28,000 Accounts payable 2,38,000
Sales returns and allowances 2,10,000 Bonds payable 1,40,000
Allowance for doubtful accounts 9,800 Administrative and general expenses 1,35,800
Sales discounts 63,000 Accrued liabilities 44,800
Land 1,40,000 Interest expense 84,000
Equipment 2,80,000 Notes payable 1,40,000
Building 1,96,000 Loss from earthquake damage (extraordinary item) 2,10,000
Cost of goods sold 8,69,400 Common stock 7,00,000
Retained earnings 29,400
Assume the total effective tax rate on all items is 34%.
Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year.
Chapter 2 Solutions
FINANCIAL ACCT.:TOOLS...(LL)-W/ACCESS
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- The comparative balance sheet of Prime Sports Gear, Inc., at December 31, the end of the fiscal year, is as follows: Additional data obtained from the records of Prime Sports Gear are as follows: a. Net income for 2013 was 121,610. b. Depreciation reported on income statement for 2013 was 46,500. c. Purchased 165,000 of new equipment, putting 90,000 cash down and issuing 75,000 of bonds for the balance. d. Old equipment originally costing 19,500, with accumulated depreciation of 7,950, was sold for 8,000. e. Retired 60,000 of bonds. f. Declared cash dividends of 64,000. g. Issued 1,500 shares of common stock at 27 cash per share. Open the file CASHFLOW from the website for this book at cengagebrain.com. First, enter the formulas. Then, complete the worksheet in the manner described next. According to the problem, cash increased from 39,600 to 67,210 during the year. This is a 27,610 increase. To record this increase on the worksheet, move to row 17. Since this is the first account you are analyzing, enter the letter a in column C. Then enter 27610 in column D (a debit since cash increased). This brings the year-end balance (column G) to 67,210, its proper balance. Now move to the bottom part of the statement where you see the categories Operating Activities, Investing Activities, and so on. The credit side of the entry has to be entered here. The proper space for this cash entry is on row 59. Enter the letter a in cell E59 and 27610 in cell F59. Notice the totals at the bottom of the page (row 60) now agree. The next account balance that changed is accounts receivable. It increased by 9,035. To enter this change on the worksheet, enter the letter b in cell C18 and 9035 in cell D18 (again, a debit since accounts receivable increased). This brings the year-end balance in column G to 121,250, its proper balance. The change in accounts receivable balance is an operating activity adjustment (as explained in your textbook). Enter the credit side of this entry in cells E34 and F34, and enter the explanation Increase in accounts receivable in cell A34. Note: Your textbook probably shows Net income as the first item under Operating Activities. We will get to that later. The sequence in which you enter items on this worksheet is not important. All other balance sheet accounts must be analyzed in the same manner, placing appropriate debit or credit entries in the top part of the worksheet to obtain the proper balances in column G, and then entering the second side of the entry in the appropriate row on the bottom part of the worksheet. You should use letter references to identify all entries. Also, you must enter a description of the entry in column A under the appropriate activity category. Although a sequence of analyzing the balance sheet from top to bottom is suggested here, this order is not necessary. As mentioned earlier, your textbook may specify a different sequence. Also, note that some accounts may have both debit and credit adjustments to them. The worksheet is not a substitute for a statement of cash flows, but it does provide you with all the numbers you need to properly prepare one. You will be done with your analysis when: a. The individual account balances at December 31, 2013, as shown on the worksheet (column G) equal those shown in the given problem data. b. The transaction column totals are equal (cells D60 and F60). c. The sum of the operating, investing, and financing activities (cell G59) equals the change in cash (cell D59 or F59). When you are finished, enter your name in cell A1. Save your completed file as CASHFLOW2. Print the worksheet when done. Also print your formulas. 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