25. The following data relate to Swift Companyfor the year ended December 31, 2011 and 2012. Swift Company usesthe accrual basis. What is Swift Companyâs pre-tax net income on anaccrual basis for the year ended December 31, 2012? You must showyour work.
2012
Sales on credit
$250,000
Cost of inventory sold on credit
170,000
Collections from customers
212,000
Purchase of inventory on credit
140,000
Payment for purchases
150,000
Selling expenses (accrual basis)
54,000
Provision for income taxes
13,000
Payment for selling expenses
45,000
25. The following data relate to Swift Companyfor the year ended December 31, 2011 and 2012. Swift Company usesthe accrual basis. What is Swift Companyâs pre-tax net income on anaccrual basis for the year ended December 31, 2012? You must showyour work.
2012 | |
Sales on credit | $250,000 |
Cost of inventory sold on credit | 170,000 |
Collections from customers | 212,000 |
Purchase of inventory on credit | 140,000 |
Payment for purchases | 150,000 |
Selling expenses (accrual basis) | 54,000 |
Provision for income taxes | 13,000 |
Payment for selling expenses | 45,000 |
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Related questions
| Golden Corp., a merchandiser, recently completed its 2015 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The companyâs balance sheets and income statement follow. |
| GOLDEN CORPORATION Comparative Balance Sheets December 31, 2015 and 2014 | ||||||
| 2015 | 2014 | |||||
| Assets | ||||||
| Cash | $ | 164,000 | $ | 107,000 | ||
| Accounts receivable | 83,000 | 71,000 | ||||
| Inventory | 601,000 | 526,000 | ||||
| Total current assets | 848,000 | 704,000 | ||||
| Equipment | 335,000 | 299,000 | ||||
| Accum. depreciationâEquipment | (158,000 | ) | (104,000 | ) | ||
| Total assets | $ | 1,025,000 | $ | 899,000 | ||
| Liabilities and Equity | ||||||
| Accounts payable | $ | 87,000 | $ | 71,000 | ||
| Income taxes payable | 28,000 | 25,000 | ||||
| Total current liabilities | 115,000 | 96,000 | ||||
| Equity | ||||||
| Common stock, $2 par value | 592,000 | 568,000 | ||||
| Paid-in capital in excess of par value, common stock | 196,000 | 160,000 | ||||
| Retained earnings | 122,000 | 75,000 | ||||
| Total liabilities and equity | $ | 1,025,000 | $ | 899,000 | ||
| GOLDEN CORPORATION Income Statement For Year Ended December 31, 2015 | |||||
| Sales | $ | 1,792,000 | |||
| Cost of goods sold | 1,086,000 | ||||
| Gross profit | 706,000 | ||||
| Operating expenses | |||||
| Depreciation expense | $ | 54,000 | |||
| Other expenses | 494,000 | 548,000 | |||
| Income before taxes | 158,000 | ||||
| Income taxes expense | 22,000 | ||||
| Net income | $ | 136,000 | |||
| Additional Information on Year 2015 Transactions | |
| a. | Purchased equipment for $36,000 cash. |
| b. | Issued 12,000 shares of common stock for $5 cash per share. |
| c. | Declared and paid $89,000 in cash dividends. |
| Required: |
| Prepare a complete statement of cash flows; report its cash flows from operating activities according to the direct method. (Amounts to be deducted should be indicated with a minus sign.) | |
