ACC-1A Lecture Notes - Lecture 18: Cash Flow Statement, Retained Earnings, Financial Statement

13 views2 pages

lemonwasp425

8 Sep 2020

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Reporting equity: the statement of changes in equity. It shows the change in a company"s equity, but more importantly, the changes in retained earnings over a specific period of time. Linking the income statement and the balance sheet. A business cannot calculate its retained earnings balance at the end of the period without factoring in the profit earned during the period. The changes in equity statement provides this link by including the net profit or loss in the calculation of retained earnings, which is then reported on the balance sheet. Therefore, when preparing financial statements for any business, the income statement must be prepared first, followed by the statement of changes in equity and then the balance sheet. Reporting cash flows: the cash flow statement: cash flow statement a financial statement that reports a business" cash inflows and outflows from its operating, investing and financial activities.

Related Questions

Problem 1-33Interrelationships among financial statements Crawford Enterprises started the 2014 accounting period with $75,000 of assets (all cash), $15,000 of liabilities, and $25,000 of common stock. During the year, Crawford earned cash revenues of $46,000, paid cash expenses of $26,000, and paid a cash dividend to stockholders of $5,000. Crawford also acquired $15,000 of additional cash from the sale of common stock and paid $10,000 cash to reduce the liability owed to a bank. Required a.Prepare an income statement, statement of changes in stockholdersâ equity, period-end balance sheet, and statement of cash flows for the 2014 accounting period. (Hint: Determine the amount of beginning retained earnings before considering the effects of the current period events. It also might help to record all events under an accounting equation before preparing the statements.) b.Determine the percentage of total assets that were provided by creditors, investors, and earnings. c.Determine the balance in the Revenue, Expense, and Dividends accounts as of January 1, 2015. LO 1-2, 1-3, 1-4, 1-5, 1-6, 1-7 CHECK FIGURES a. Net Income: $19,000 e. Net Cash Flow from Operating Activities: $19,000

lavenderwombat729

Sendelbach Corporation is a U.S.âbased organization with operations throughout the world. One of its subsidiaries is headquartered in Toronto. Although this wholly owned company operates primarily in Canada, it engages in some transactions through a branch in Mexico. Therefore, the subsidiary maintains a ledger denominated in Mexican pesos (Ps) and a general ledger in Canadian dollars (C$). As of December 31, 2015, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows:

Main OperationâCanada
	Debit	Credit
Accounts payable		C$ 39,605
Accumulated depreciation		41,000
Buildings and equipment	C$ 181,000
Cash	40,000
Common stock		64,000
Cost of goods sold	217,000
Depreciation expense	8,300
Dividends, 4/1/15	33,000
Gain on sale of equipment, 6/1/15		6,400
Inventory	93,000
Notes payableâdue in 2018		83,000
Receivables	82,000
Retained earnings, 1/1/15		149,590
Salary expense	37,000
Sales		326,000
Utility expense	10,400
Branch operation	7,895

Totals	C$ 709,595	C$ 709,595

Branch OperationâMexico
	Debit	Credit
Accounts payable		Ps 64,900
Accumulated depreciation		39,900
Building and equipment	Ps 54,000
Cash	66,000
Depreciation expense	3,400
Inventory (beginningâincome statement)	37,000
Inventory (endingâincome statement)		35,000
Inventory (endingâbalance sheet)	35,000
Purchases	71,000
Receivables	35,000
Salary expense	10,400
Sales		138,000
Main office		34,000

Totals	Ps 311,800	Ps 311,800

Additional Information

â¢	The Canadian subsidiaryâs functional currency is the Canadian dollar, and Sendelbachâs reporting currency is the U.S. dollar. The Canadian and Mexican operations are not viewed as separate accounting entities.
â¢	The building and equipment used in the Mexican operation were acquired in 2005 when the currency exchange rate was C$0.22 = Ps 1.
â¢	Purchases should be assumed as having been made evenly throughout the fiscal year.
â¢	Beginning inventory was acquired evenly throughout 2014; ending inventory was acquired evenly throughout 2015.
â¢	The Main Office account on the Mexican records should be considered an equity account. This balance was remeasured into C$7,895 on December 31, 2015.
â¢	Currency exchange rates for 1 Ps applicable to the Mexican operation follow:


Weighted average, 2014	C$	0.27
January 1, 2015		0.29
Weighted average rate for 2015		0.31
December 31, 2015		0.32

â¢	The December 31, 2014, consolidated balance sheet reported a cumulative translation adjustment with a $50,950 credit (positive) balance.
â¢	The subsidiaryâs common stock was issued in 2004 when the exchange rate was $0.43 = C$1.

â¢	The subsidiaryâs December 31, 2014, Retained Earnings balance was C$149,590.00, a figure that has been translated into US$71,043.
â¢	The applicable currency exchange rates for 1 C$ for translation purposes are as follows:


January 1, 2015	US$	0.70
April 1, 2015		0.69
June 1, 2015		0.68
Weighted average rate for 2015		0.67
December 31, 2015		0.65

Remeasure the Mexican operationâs figures into Canadian dollars. (Hint: Back into the beginning net monetary asset or liability position.) (Input all amounts as positive values.)

	Canadian Dollars
	Debit	Credit
Accounts payable		20,768
Accumulated depreciation		8,778
Building and equipment	11,880
Cash	21,120
Depreciation expense	748
Inventory (beginningâincome statement)	9,990
Inventory (endingâincome statement)		10,850
Inventory (endingâbalance sheet)	10,850
Purchases	22,010
Receivables	11,200
Salary expense	3,224
Sales		42,780
Main office		7,895
Remeasurement loss	49
Total	91,071	91,071

Prepare financial statements (income statement, statement of retained earnings, and balance sheet) for the Canadian subsidiary in its functional currency and Prepare consolidated financial statement in parent currency (that is U.S. dollars). (Round U.S. Dollar values to 2 decimal places. Amounts to be deducted and losses should be indicated with a minus sign.)

SENDELBACH CORPORATION
Financial Statements
For the Year Ended December 31, 2015
	Canadian Dollar		U.S. Dollar
Income Statement:
Sales	C$	368,780
Cost of goods sold
Gross profit	C$	368,780	$0.00
Salary expense
Utility expense
Depreciation expense
Gain on sale of equipment
Remeasurement loss

Net income	C$	368,780	$0.00

Statement of Retained Earnings:
Retained earnings, 1/1/15	C$
Net income
Dividends
Retained earnings, 12/31/15	C$	0	$0.00

Balance Sheet:
Assets:
Cash	C$
Receivables
Inventory
Buildings and equipment
Accumulated depreciation

Total assets	C$	0	$0.00
Liabilities and Equities:
Accounts payable	C$
Notes payable
Common stock
Retained earnings


Total liabilities and equities	C$	0	$0.00

I figured out part A but need help with part B please!

Thank you in advance!!!

raspberrywhale242

QUESTION 1

The ownership of a corporation is represented by:

		shares of stock.
		the owner's capital account.
		the revenue account.
		cash in bank account.

QUESTION 2

How many classifications does a Capital Stock Account have?

		One
		Two
		Three
		Four

QUESTION 3

The equity contributed by stockholders and equity earned throughbusiness profits represent the stockholders' equity for a:

		partnership firm.
		sole proprietorship.
		corporation.
		none of these.

QUESTION 4

Retained earnings are a part of a/an:

		asset account.
		permanent account.
		stockholders' equity account.
		temporary account.

QUESTION 5

How many sections does an Income Statement have?

		Two
		Three
		Four
		Five

QUESTION 6

Net sales are related to the:

		net income section.
		gross profit on sales section.
		revenue section.
		cost of merchandise sold section.

QUESTION 7

Sales discount and sales return and allowance are:

		revenue accounts.
		contra revenue accounts.
		permanent accounts.
		contra expenses accounts.

QUESTION 8

The total cost related to merchandise purchases during anaccounting period is the:

		net purchase.
		cost of merchandise sold.
		cost of merchandise available for sale.
		beginning merchandise inventory.

QUESTION 9

The gross profit on sale is $65,000, and operating expenses is$35,000. What will be the operating profit?

		$65,000
		$35,000
		$100,000
		$30,000

QUESTION 10

A balance sheet has the following sections:

		Assets, liabilities, and stockholders' equity.
		Income, expenses, and stockholders' equity.
		Assets, liabilities, and income.
		Operating income, operating expenses, and stockholders'equity.

QUESTION 11

A cash flow statement is used to assess the:

		net increase or decrease of cash.
		net increases of cash only.
		net decrease of cash only.
		net profit or loss of business.

ACC-1A Lecture Notes - Lecture 18: Cash Flow Statement, Retained Earnings, Financial Statement

Document Summary

Get access

Related Documents

ACC-1A Lecture Notes - Lecture 3: Accounting Equation, A Question Of Balance, Financial Statement

ACC-1A Lecture Notes - Lecture 5: Asset, Accounting Equation, Net Income

ACC-1A Lecture Notes - Lecture 21: Disclose, Financial Statement, Accounting Equation

Related Questions