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ACCOUNTING Lecture Notes - Accounts Payable, Retained Earnings, Share Capital

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School
Fordham University
Department
Accounting
Course
ACCOUNTING
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Document Summary

Additional exercises: - by the end of the week, practice some more by making the additional exercises that we created on the wiley plus website. You can now also practice your accounting and business skills by completing level 2 of the. Important: you are expected to prepare the two tasks below before the tutorial meeting using the information in the video and chapter 14 of the textbook. The meeting will start with a discussion of the most common errors made in tasks 20 and 21. There is also room to ask questions about these tasks. Yvonne, the controller of copyservice, is drawing up the financial statements for the year: she starts by digging up the 2017 balance sheet. Balance sheet copyservice for the year ended december 31, 2017 (in ) A total of 18,000 was paid for wages in cash: the equipment is estimated to have an economic life of 10 years and has a 10,000 salvage value.

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Related Questions

Once a trial balance has been prepared, the next step of the accounting cycle involves:

a. Classifying the transactions into logical categories.

b. Preparing financial statements such as the balance sheet, income statement, and statement of cash flows.

c. Completing a balance sheet and ratio analysis.

d. Posting the information to the correct ledger accounts.

 

 

QS 12-19 Indirect: Preparing statement of cash flows LO P1, P2, P3

MONTGOMERY INC.
Comparative Balance Sheets
December 31, 2018 and 2017
2018 2017
Assets
Cash $ 33,200 $ 33,400
Accounts receivable, net 12,100 14,700
Inventory 108,500 84,900
Total current assets 153,800 133,000
Equipment 60,100 50,200
Accum. depreciation—Equipment (27,100 ) (18,500 )
Total assets $ 186,800 $ 164,700
Liabilities and Equity
Accounts payable $ 28,800 $ 30,700
Salaries payable 600 700
Total current liabilities 29,400 31,400
Equity
Common stock, no par value 130,000 118,100
Retained earnings 27,400 15,200
Total liabilities and equity $ 186,800 $ 164,700
MONTGOMERY INC.
Income Statement
For Year Ended December 31, 2018
Sales $ 53,500
Cost of goods sold (22,200 )
Gross profit 31,300
Operating expenses
Depreciation expense $ 8,600
Other expenses 6,600
Total operating expense 15,200
Income before taxes 16,100
Income tax expense 3,900
Net income $ 12,200


Additional Information

No dividends are declared or paid in 2018.

Issued additional stock for $11,900 cash in 2018.

Purchased equipment for cash in 2018; no equipment was sold in 2018.


1. Use the above financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2018, using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)

MONTGOMERY, INC.
Statement of Cash Flows (Indirect Method)
For Year Ended December 31, 2018
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operations:
Changes in current operating assets and liabilities
$0
Cash flows from investing activities
0
Cash flows from financing activities
0
$0
Cash balance at beginning of year
Cash balance at end of year $0

Following is a list of financial statement items and amounts forTim Burr’s Tree Service as of 12/31/X3, the end of its first yearin operation. Accounts Receivable $ 42,000 Accounts Payable 32,000Cash 10,200 Common Stock 22,000 Notes Payable 10,400 Equipment51,000 Service Revenue 110,000 Fuel Expense 10,200 Rent Expense11,900 Advertising Expense 5,200 Salaries and Wages Expense 22,000Retained Earnings ? Dividends 21,900

1. Prepare the Income Statement for the yearended December 31, 20X3.

2. Prepare the statement of retained earningsfor the year ended December 31, 20X3.

3. Prepare the balance sheet for the year endedDecember 31, 20X3.