Question: The three accounts shown below appear in
The three accounts shown below appear in the general ledger of Lauber Corp. during 2014.
Instructions:
From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of plant assets was $8,000.
Transcribed Image Text:
Equipment Debit Credit Date Balance Jan. Balance July 31 Sept. 2 Nov. 10 Purchase of equipment Cost of equipment constructed Cost of equipment sold 160,000 230,000 283,000 234,000 70,000 53,000 49,000 Accumulated Depreciation-Equipment Debit Date Credit Balance Jan. Balance 71,000 Nov. 10 Accumulated Depreciation on equipment sold Depreciation for year 16,000 55,000 83,000 Dec. 31 28,000 Retained Earnings Date Debit Credit Balance Jan. 1 Balance Aug. 23 Dec. 31 105,000 91,000 163,000 Dividends (cash) 14,000 Net income 72,000
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> Suppose Columbia Sportswear Company had accounts receivable of $299,585,000 at January 1, 2014, and $226,548,000 at December 31, 2014. Assume sales revenue was $1,244,023,000 for the year 2014. What is the amount of cash receipts from customers in 2014?
> An inexperienced accountant for Fielder Corporation showed the following in Fielder’s 2014 income statement: Income before income taxes $300,000; Income tax expense $72,000; Extraordinary loss from flood (before taxes) $80,000; and Net income $168,000. T
> Each of these items must be considered in preparing a statement of cash flows for Irvin Co. for the year ended December 31, 2014. For each item, state how it should be shown in the statement of cash flows for 2014. (a) Issued bonds for $200,000 cash. (b)
> Romine Company issued $350,000 of 8%, 20-year bonds on January 1, 2014, at face value. Interest is payable annually on January 1. Instructions: Prepare the journal entries to record the following events. (a) The issuance of the bonds. (b) The accrual of
> Assume that the following are independent situations recently reported in the Wall Street Journal. 1. General Electric (GE) 7% bonds, maturing January 28, 2015, were issued at 111.12. 2. Boeing 7% bonds, maturing September 24, 2029, were issued at 99.08.
> Riot Company issued $500,000, 15-year, 7% bonds at 96. Instructions: (a) Prepare the journal entry to record the sale of these bonds on January 1, 2014. (b) Suppose the remaining Discount on Bonds Payable was $12,000 on December 31, 2019. Show the balan
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> During the month of March, Olinger Company’s employees earned wages of $64,000. Withholdings related to these wages were $4,896 for Social Security (FICA), $7,500 for federal income tax, $3,100 for state income tax, and $400 for union dues. The company i
> On August 1, 2014, Ortega Corporation issued $600,000, 7%, 10-year bonds at face value. Interest is payable annually on August 1. Ortega’s year-end is December 31. Instructions: Prepare journal entries to record the following events. (a) The issuance of
> On June 1, Fancher Company Ltd. borrows $60,000 from First Bank on a 6-month, $60,000, 8% note. The note matures on December 1. Instructions: (a) Prepare the entry on June 1. (b) Prepare the adjusting entry on June 30. (c) Prepare the entry at maturity
> On May 15, Criqui Outback Clothiers borrowed some money on a 4-month note to provide cash during the slow season of the year. The interest rate on the note was 8%. At the time the note was due, the amount of interest owed was $480. Instructions: (a) Det
> During the month of March, Olinger Company’s employees earned wages of $64,000. Withholdings related to these wages were $4,896 for Social Security (FICA), $7,500 for federal income tax, $3,100 for state income tax, and $400 for union dues. The company i
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> Data for Susan Braun are presented in BE10-5. Prepare the employer’s journal entries to record (a) Susan’s pay for the period and (b) the payment of Susan’s wages. Use January 15 for the end of the pay period and the payment date. Data for Susan Braun:
> On June 1, Fancher Company Ltd. borrows $60,000 from First Bank on a 6-month, $60,000, 8% note. The note matures on December 1. Instructions: (a) Prepare the entry on June 1. (b) Prepare the adjusting entry on June 30. (c) Prepare the entry at maturity
> On May 15, Criqui Outback Clothiers borrowed some money on a 4-month note to provide cash during the slow season of the year. The interest rate on the note was 8%. At the time the note was due, the amount of interest owed was $480. Instructions: (a) Det
> Jenny Kane and Cindy Travis borrowed $15,000 on a 7-month, 8% note from Golden State Bank to open their business, KT’s Coffee House. The money was borrowed on June 1, 2014, and the note matures January 1, 2015. Instructions: (a) Prepare the entry to rec
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> Kwik Delivery Service reports the following costs and expenses in June 2014. Instructions: Determine the total amount of (a) delivery service (product) costs and (b) period costs. $ 5,400 Drivers' salaries 11,200 Advertising 5,000 Delivery equipm
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> The following is a list of terms related to managerial accounting practices. 1. Activity-based costing. 2. Just-in-time inventory. 3. Balanced scorecard. 4. Value chain. Instructions: Match each of the terms with the statement below that best describes
> Buhler Motor Company manufactures automobiles. During September 2014, the company purchased 5,000 head lamps at a cost of $10 per lamp. Buhler withdrew 4,650 lamps from the warehouse during the month. Fifty of these lamps were used to replace the head la
> Data for Susan Braun are presented in BE10-5. Prepare the employer’s journal entries to record (a) Susan’s pay for the period and (b) the payment of Susan’s wages. Use January 15 for the end of the pay period and the payment date. Data for Susan Braun:
> An analysis of the accounts of Roberts Company reveals the following manufacturing cost data for the month ended June 30, 2014. Costs incurred: raw materials purchases $54,000, direct labor $47,000, manufacturing overhead $19,900. The specific overhead
> The following information is available for Aikman Company Instructions: (a) Compute cost of goods manufactured. (b) Prepare an income statement through gross profit. (c) Show the presentation of the ending inventories on the December 31, 2014, balance
> Joyce Tombert, the bookkeeper for Marks Consulting, a political consulting firm, has recently completed a managerial accounting course at her local college. One of the topics covered in the course was the cost of goods manufactured schedule. Joyce wonder
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> Incomplete manufacturing cost data for Colaw Company for 2014 are presented as follows for four different situations. Instructions: (a) Indicate the missing amount for each letter. (b) Prepare a condensed cost of goods manufactured schedule for situati
> Manufacturing cost data for Copa Company are presented below. Instructions: Indicate the missing amount for each letter (a) through (i). Case A Case B Case C Direct materials used Direct labor $ (a) 57,000 46,500 $68,400 86,000 81,600 $130,000 (g)
> Richard Larkin has prepared the following list of statements about managerial accounting and financial accounting. 1. Financial accounting focuses on providing information to internal users. 2. Analyzing cost-volume-profit relationships is part of manage
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> Nordstrom, Inc. operates department stores in numerous states. Suppose selected financial statement data (in millions) for 2014 are presented below. For the year, net credit sales were $8,258 million, cost of goods sold was $5,328 million, and net cash
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> On January 1, 2014, Jenner Inc. changed from the LIFO method of inventory pricing to the FIFO method. Explain how this change in accounting principle should be treated in the company’s financial statements.
> Suppose the comparative balance sheets of Nike, Inc. are presented here Instructions: (a) Prepare a horizontal analysis of the balance sheet data for Nike, using 2013 as a base. (Show the amount of increase or decrease as well.) (b) Prepare a vertical
> Operating data for Jacobs Corporation are presented below. Instructions: Prepare a schedule showing a vertical analysis for 2014 and 2013. 2014 2013 Sales revenue Cost of goods sold Selling expenses Administrative expenses $800,000 520,000 $600,000
> Here is financial information for Spangles Inc. Instructions: Prepare a schedule showing a horizontal analysis for 2014, using 2013 as the base year. December 31, 2014 Current assets Plant assets (net) Current liabilities Long-term liabilities Comm
> The Wall Street Journal routinely publishes summaries of corporate quarterly and vannual earnings reports in a feature called the “Earnings Digest.” A typical “digest” report takes t
> The condensed financial statements of Elliott Company for the years 2013 and 2014 are presented below. Compute the following ratios for 2014 and 2013. (a) Current ratio. (b) Inventory turnover. (Inventory on December 31, 2012, was $340.) (c) Profit mar
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> Suppose selected comparative statement data for the giant bookseller Barnes & Noble are presented here. All balance sheet data are as of the end of the fiscal year (in millions). Instructions: Compute the following ratios for 2014. (a) Profit margi
> Information for two companies in the same industry, Patton Corporation and Sager Corporation, is presented here. Instructions: Using the cash-based measures presented in this chapter, compare the (a) liquidity and (b) solvency of the two companies.
> Suppose presented below is 2014 information for PepsiCo, Inc. and The Coca-Cola Company. Instructions: Using the cash-based measures presented in this chapter, compare the (a) liquidity and (b) solvency of the two companies. ($ in millions) Net cas
> Shown below and on the next page are comparative balance sheets for Schmitt Company. Additional information: 1. Net income for 2014 was $93,000. 2. Depreciation expense was $34,000. 3. Cash dividends of $39,000 were declared and paid. 4. Bonds payable
> Manuel, Inc. reported net income of $2.5 million in 2014. Depreciation for the year was $160,000, accounts receivable decreased $350,000, and accounts payable decreased $280,000. Compute net cash provided by operating activities using the indirect approa
> The following information is available for Ramos Corporation for the year ended December 31, 2014. Beginning cash balance …………………………………………………. $ 45,000 Accounts payable decrease ……………………………………………………3,700 Depreciation expense ………………………………………………………. 162,00
> The current sections of Sanford Inc.’s balance sheets at December 31, 2013 and 2014, are presented here. Sanford’s net income for 2014 was $153,000. Depreciation expense was $27,000. Instructions: Prepare the net cas
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> The following information is taken from the 2014 general ledger of Praeger Company Instructions: In each case, compute the amount that should be reported in the operating activities section of the statement of cash flows under the direct method. Re
> The following information is available for Taliaferro Corp. for 2014. Cash used to purchase treasury stock ………………………………………………..$ 48,100 Cash dividends paid …………………………………………………………………………….21,800 Cash paid for interest …………………………………………………………………………..22,400
> Suppose the 2014 income statement for McDonald’s Corporation shows cost of goods sold $5,178.0 million and operating expenses (including depreciation expense of $1,216.2 million) $10,725.7 million. The comparative balance sheet for the year shows that in
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> The following stockholders’ equity accounts, arranged alphabetically, are in the ledger of Roder Corporation at December 31, 2014. Common Stock ($2 stated value) …………………………………………………..$1,600,000 Paid-in Capital in Excess of Par Value—Preferred Stock …………
> Andrea Hanlin is planning to start a business. Identify for Andrea the advantages and disadvantages of the corporate form of business organization.
> Wells Fargo & Company, headquartered in San Francisco, is one of the nation’s largest financial institutions. Suppose it reported the following selected accounts (in millions) as of December 31, 2014. Retained earnings …………………………………………………………………..$41,563
> On January 1, Vanessa Corporation had 60,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred. Apr. 1 Issued 9,000 additional shares of common stock
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> Fagan Co. had these transactions during the current period. June 12 Issued 80,000 shares of $1 par value common stock for cash of $300,000. July 11 Issued 3,000 shares of $100 par value preferred stock for cash at $106 per share. Nov. 28 Purchased
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> Trayer Company obtains $20,000 in cash by signing a 9%, 6-month, $20,000 note payable to First Bank on July 1. Trayer’s fiscal year ends on September 30. What information should be reported for the note payable in the annual financial statements?
> Samuel Engels says that liquidity and solvency are the same thing. Is he correct? If not, how do they differ?
> Peggy Jantzen believes a current liability is a debt that can be expected to be paid in one year. Is Peggy correct? Explain.
> Jack and Lance are discussing how the market price of a bond is determined. Jack believes that the market price of a bond is solely a function of the amount of the principal payment at the end of the term of a bond. Is he right? Discuss.
> Assume that Ziegler Inc. sold bonds with a face value of $100,000 for $104,000. Was the market interest rate equal to, less than, or greater than the bonds’ contractual interest rate? Explain.
> Identify the liabilities classified by Tootsie Roll as current.
> What is activity-based costing, and what are its potential benefits?
> Explain what is meant by “balanced” in the balanced scorecard approach.
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> What is the value chain? Describe, in sequence, the main components of a manufacturer’s value chain.
> During its first year of operations, Rosa Corporation had these transactions pertaining to its common stock. Jan. 10 Issued 30,000 shares for cash at $5 per share. July 1 Issued 60,000 shares for cash at $7 per share. Instructions: (a) Journalize the t
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> The determination of the cost of goods manufactured involves the following factors: (A) beginning work in process inventory, (B) total manufacturing costs, and (C) ending work in process inventory. Identify the meaning of x in the following formulas:
> Identify the differences in the cost of goods sold section of an income statement between a merchandising company and a manufacturing company.
> Tina Burke is confused about the differences between a product cost and a period cost. Explain the differences to Tina.
> Dakota University sold 9,000 season football tickets at $100 each for its five-game home schedule. What entries should be made (a) when the tickets are sold and (b) after each game?
> How are manufacturing costs classified?
> Jerry Lang is unclear as to the difference between the balance sheets of a merchandising company and a manufacturing company. Explain the difference to Jerry.
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> Identify five items that are adjustments to convert net income to net cash provided by operating activities under the indirect method.
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