AFM102 Study Guide - Midterm Guide: Retained Earnings, Income Statement, Weighted Arithmetic Mean

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apricottoad869

15 Oct 2015

School

University of Waterloo

Department

Accounting & Financial Management

Course

AFM102

Professor

Peter Blake

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Document Summary

Financial accounting know the objective of financial accounting and the role accountants play in an organization (recording transactions) Income statement: sales, cost of goods sold, gross profit, sg&a expense(might be 5 or 10 expense that go under here), commissions (expense), operating expense, other income/expense (interest revenue/ expense), income before tax, income tax expense, net income. Statement of retained earnings: year ended, as at, opening, add: net income (loss), less: Balance sheet: as at, memorize the headings and figure out where the accounts go. Assets (property plant and equipment, other long term assets, total assets), current liabilities (long term liabilities, total liabilities, preferred shares, common shares, retained earnings, total. Statement of cash flows: year ended, operating (cash flows), investing (cash flows) and financings (cash flows). Net income (add: depreciation, less: gain/loss on disposal). Sheet presentation (gross a/r vs. net) - good news: you get paid more bad news: they might not pay you.

Related Questions

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. depreciationâEquipment		(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

The following are the financial statements of Nosker Company.NOSKER COMPANY Comparative Balance Sheets December 31 Assets 20172016 Cash $ 34,050 $ 19,350 Accounts receivable 32,050 20,000Inventory 26,800 20,100 Equipment 59,550 77,250 Accumulateddepreciationâequipment (29,750 ) (24,000 ) Total $122,700 $112,700Liabilities and Stockholdersâ Equity Accounts payable $ 29,000 $16,150 Income taxes payable 7,000 8,150 Bonds payable 27,400 32,900Common stock 17,250 14,650 Retained earnings 42,050 40,850 Total$122,700 $112,700 NOSKER COMPANY Income Statement For the YearEnded December 31, 2017 Sales revenue $242,350 Cost of goods sold176,600 Gross profit 65,750 Operating expenses 24,150 Income fromoperations 41,600 Interest expense 3,500 Income before income taxes38,100 Income tax expense 8,800 Net income $ 29,300 Additionaldata: 1. Dividends declared and paid were $28,100. 2. During theyear equipment was sold for $8,350 cash. This equipment cost$17,700 originally and had accumulated depreciation of $9,350 atthe time of sale. 3. All depreciation expense, $15,100, is in theoperating expenses. 4. All sales and purchases are on account.Prepare a statement of cash flows using the indirect method. (Showamounts that decrease cash flow with either a - sign e.g. -15,000or in parenthesis e.g. (15,000).) NOSKER COMPANY Statement of CashFlows $ Adjustments to reconcile net income to $ $

Compute free cash flow.

bluemallard299

I need help with the assessment below. I cannot figure it out for he life of me. Help with these parts below would be greatly appreciated!




Preparing statement of cash flow


(Preparation and Analysis of Statement of Cash Flows) Here are the financial statements of Falcon Company.

Falcon Company
Comparative Balance Sheets
December 31, 2016
Assets				2016		2015
Cash				$13,000		$16,500
Accounts receivable				14,000		7,000
Merchandise inventory				19,000		12,500
Property, plant, and equipment			$35,000		$39,000
Less: Accumulated depreciation			(13,500)	21,500	(12,000)	27,000
Total				$67,500		$63,000
Liabilities and Stockholdersâ Equity
Accounts payable				$15,500		$21,500
Income taxes payable				13,000		10,000
Bonds payable				10,000		5,000
Common stock				12,500		12,500
Retained earnings				16,500		14,000
Total				$67,500		$63,000

	Falcon Company
	Income Statement
	For the Year Ended December 31, 2016
	Sales				$143,000
	Cost of goods sold				97,000
	Gross profit				46,000
	Selling expenses			$14,000
	Administrative expenses			4,500	18,500
	Income from operations				27,500
	Interest expense				3,500
	Income before income taxes				24,000
	Income tax expense				3,500
	Net income				$20,500

Additional data:
1. Dividends of	$18,000	were declared and paid.
2. During the year equipment was sold for 5,000 cash. This equipment originally cost 7,500, and it had a book value of 5,000 at the time of sale.

3. All depreciation expense, 4,000, is in the sellling expense catagory.
4. All sales and purchases are on account.
5. Additional equipment was purchased for 3,500 cash.
Instructions:
(a) Prepare a statement of cash flows using the indirect method.



	(b)(1) Compute the current cash debt coverage ratio.







	(b)(2) Compute the cash debt coverage ratio.




	(b)(3) Compute the free cash flow.

pearkoala914

AFM102 Study Guide - Midterm Guide: Retained Earnings, Income Statement, Weighted Arithmetic Mean

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