INTERMEDIATE ACCOUNTING +ACCLL
9th Edition
ISBN: 9781260951349
Author: SPICELAND
Publisher: MCG
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Chapter 3, Problem 3.9E
• LO3–2, LO3–3
The following is the balance sheet of Korver Supply Company at December 31, 2017.
KORVER SUPPLY COMPANY
Balance Sheet
At December 31, 2 017
Assets
| Cash | $120,000 |
| Accounts receivable | 300,000 |
| Inventories | 200,000 |
| Furniture and fixtures, net | 150,000 |
| Total assets | $770,000 |
Liabilities and Shareholders’ Equity
| Accounts payable (for merchandise) | $190,000 |
| Note payable | 200,000 |
| Interest payable | 6,000 |
| Common stock | 100,000 |
| 274,000 | |
| Total liabilities and shareholders’ equity | $770,000 |
Transactions during 2018 were as follows:
1. Sales to customers on account $800,000
2. Cash collected from customers 780,000
3. Purchase of merchandise on account 550,000
4. Cash payment to suppliers 560,000
5. Cost of merchandise sold 500,000
6. Cash paid for operating expenses 160,000
7. Cash paid for interest on note 12,000
The note payable is dated June 30, 2017 and is due on June 30, 2019. Interest at 6% is payable annually on June 30.
Required:
Prepare a classified balance sheet at December 31, 2018 (ignore income taxes).
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A
PROBLEM NO. 10
A portion of the SPARK COMPANY's statement of financial position appears as follows:
December 31, 2017
December 31, 2016
Assets:
Cash
Notes receivable
Inventory
-000000000--
Llabilities:
P100,000
25,000 5
199,875
75,000
Spark Company pays for all operating expenses with cash and purchases all inventory on credit
During 2017, cash totaling P471,700 was paid on accounts payable. Operating expenses for 2017
totaled P220,000. All sales are cash sales. The inventory was restocked by purchasing 1,500
units per month and valued by using periodic FIFO. The unit cost of inventory was P32.60 during
January 2017 and increased P0.10 per month dunng the year. Spark selis only one product. All
sales are made for P50 per unit. The ending inventory for 2016 was valued at P32.50 per unit
Accounts payable
P353,300
0
?
PC 35 A
Comparative Balance Sheet 2018 2017
Current Assets
Cash $94,300 $21,500
Accts Receivable 14,700 21,400
Merchandise Inventory 62,200 59,200
Current Liabilities
Accounts Payable 31,600 29,100
Accrued Liabilities 11,200 11,500
2018 transactions
Payment of cash dividends $18,200
Purchase of equipment with cash 54,800
Issuance of long-term notes payable to borrow cash 44,000
Issuance of common stock for cash 113,000
Depreciation expense…
the nearest percent.
Which company has the most seasonal business? Briefly explain.
Which company is Toys "R" Us? The Gillette Company? Briefly explain.
c.
d.
SERIAL PROBLEM:KATE'S CARDS
Kate is very pleased with the results of the first year of operations for Kate's Cards. She ended the
year on a high note, with the company's reputation for producing quality cards leading to more basi-
ness than she can currently manage. Kate is considering expanding and bringing in several employ-
ees. In order to do this, she will need to find a larger location and also purchase more equipment. All
this means additional financing. Kate has asked you to look at her year-end financial statements as if
you were a banker considering giving Kate a loan. Comment on your findings and provide calcula-
tions to support your comments.
(Note: This is a continuation of the Serial Problem: Kate's Cards from Chapter 1 through Chapter 12.)
SP13.
KATE'S CARDS
Income Statement
Year Ended August 31, 2019
$185,000…
Chapter 3 Solutions
INTERMEDIATE ACCOUNTING +ACCLL
Ch. 3 - Prob. 3.1QCh. 3 - Prob. 3.2QCh. 3 - Define current assets and list the typical asset...Ch. 3 - Prob. 3.4QCh. 3 - Prob. 3.5QCh. 3 - Prob. 3.6QCh. 3 - Describe the common characteristics of assets...Ch. 3 - Prob. 3.8QCh. 3 - Prob. 3.9QCh. 3 - Define the terms paid-in-capital and retained...
Ch. 3 - Disclosure notes are an integral part of the...Ch. 3 - A summary of the companys significant accounting...Ch. 3 - Define a subsequent event.Ch. 3 - Prob. 3.14QCh. 3 - Prob. 3.15QCh. 3 - Prob. 3.16QCh. 3 - Prob. 3.17QCh. 3 - Show the calculation of the following solvency...Ch. 3 - Prob. 3.19QCh. 3 - Prob. 3.20QCh. 3 - (Based on Appendix 3) Segment reporting...Ch. 3 - Prob. 3.22QCh. 3 - Prob. 3.23QCh. 3 - Current versus long-term classification LO32,...Ch. 3 - Balance sheet classification LO32, LO33 The trial...Ch. 3 - Prob. 3.3BECh. 3 - Balance sheet classification LO32, LO33 Refer to...Ch. 3 - Balance sheet classification LO32, LO33 The...Ch. 3 - Balance sheet classification LO32, LO33 You have...Ch. 3 - Balance sheet preparation; missing elements LO32,...Ch. 3 - Financial statement disclosures LO34 For each of...Ch. 3 - Calculating ratios LO38 Refer to the trial...Ch. 3 - Prob. 3.10BECh. 3 - Calculating ratios; solving for unknowns LO38 The...Ch. 3 - Balance sheet; missing elements LO32, LO33, LO38...Ch. 3 - Balance sheet classification LO32, LO33 The...Ch. 3 - Balance sheet classification LO32, LO33 The...Ch. 3 - Balance sheet preparation LO32, LO33 The...Ch. 3 - Balance sheet preparation LO32, LO33 The...Ch. 3 - Balance sheet; Current versus long-term...Ch. 3 - Prob. 3.7ECh. 3 - Prob. 3.8ECh. 3 - Balance sheet preparation LO32, LO33 The...Ch. 3 - Financial statement disclosures LO34 The...Ch. 3 - Prob. 3.11ECh. 3 - Prob. 3.12ECh. 3 - Prob. 3.13ECh. 3 - FASB codification research LO32, LO34 Access the...Ch. 3 - Prob. 3.15ECh. 3 - Prob. 3.16ECh. 3 - Prob. 3.17ECh. 3 - Calculating ratios; solve for unknowns LO38 The...Ch. 3 - Prob. 3.19ECh. 3 - Effect of management decisions on ratios LO38...Ch. 3 - Prob. 3.21ECh. 3 - Prob. 3.22ECh. 3 - Balance sheet preparation LO32, LO33 Presented...Ch. 3 - Balance sheet preparation; missing elements LO32,...Ch. 3 - Balance sheet preparation LO32, LO33 The...Ch. 3 - Balance sheet preparation LO32, LO33 The...Ch. 3 - Balance sheet preparation LO32, LO33 The...Ch. 3 - Prob. 3.6PCh. 3 - Balance sheet preparation; errors LO32, LO33 The...Ch. 3 - Balance sheet; errors; missing amounts LO32, LO33...Ch. 3 - Balance sheet preparation LO32 , LO33 Presented...Ch. 3 - Prob. 3.10PCh. 3 - Communication Case 31 Current versus long-term...Ch. 3 - Analysis Case 32 Current versus long- term...Ch. 3 - Prob. 3.4BYPCh. 3 - Judgment Case 35 Balance sheet; errors LO32...Ch. 3 - Prob. 3.6BYPCh. 3 - Real World Case 37 Balance sheet and significant...Ch. 3 - Judgment Case 38 Post fiscal year-end e vents ...Ch. 3 - Prob. 3.9BYPCh. 3 - Prob. 3.10BYPCh. 3 - Prob. 3.11BYPCh. 3 - Analysis Case 314 Balance sheet information LO32...Ch. 3 - Prob. 3.15BYPCh. 3 - Ethics Case 316 Segment reporting Appendix 3 You...Ch. 3 - Prob. 1CCTC
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