ACCT 2001 Chapter : Chapter 2

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azuremammoth471

15 Mar 2019

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Assets = liabilities + equity (everything you own = outside earnings + inside earnings) Payables : retained earnings (revenue - expenses dividends) Retained earnings (income statement; net income or loss?: paid in. Operating cycle- how long it takes to make and then sell something. Long-term investments: stocks, bonds, land or equipment currently not in use, notes receivable and mortgage receivable. Property, plant, and equipment: currently used in operation (land, buildings, equipment, delivery vehicles, and furniture) Depreciation- spreading the cost of something over a few years. Accumulated depreciation- total amount of the cost being spread over the asset"s life. Intangible assets- things you have but cant touch (i. e. patents) Current liabilities- things being paid for within the next year or operating cycle. Long-term liabilities- obligations to be paid after one year: bonds payable, mortgages payable, long-term notes payable, lease liabilities, pension liabilities.

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Nelson Co.

Income Statement

For the years ending

	12/31/13	12/31/14
Sales	$8,500,000	$9,150,000
Cost of goods sold	4,500,000	5,350,000
Gross profit
Selling Expense	1,600,000	1,900,000
Administrative expense	1,300,000	1,400,000
Income from operations
Other Income	40,000	150,000
Interest expense	50,000	30,000
Income before taxes
Income taxes 25%
Net Income

Nelson Co.

Retained Earnings Statement

For the years ending

	12/31/13	12/31/14
Retained Earnings â Beg. Balance	$3,758,000
Net income
Preferred dividends
Common dividends	50,000	50,000
Retained Earnings- Ending Balance

Nelson Co.

Balance Sheet

As of

	12/31/13	12/31/14
Assets
Current Assets:
Cash	300,000	250,000
Short term investments	910,000	800,000
Account receivable	540,000	410,000
Inventory	990,000	950,000
Prepaid expenses	250,000	210,000
Total current assets
Long term investments	1,800,000	1,900,000
Land Buildings Equipment	3,240,000	3,466,000
Total Assets
Liabilities
Current Liabilities:	979,000	780,000
Long term Liabilities:
Mortgage Payable 8% due 2025	200,000	90,000
Bonds payable $5	1,400,000	1,300,000
Total Liabilities
Shareholdersâ Equity
Preferred stock $10 par 10%	500,000	500,000
Common Stock, $5 par	400,000	400,000
Retained Earning	4,475,500	4,840,500
Total shareholdersâ equity
Total Liabilities & shareholdersâ equity

Fill in the blanks on the financial statements.

blackantelope761

Nelson Co.

Income Statement

For the years ending

	12/31/13	12/31/14
Sales	$8,500,000	$9,150,000
Cost of goods sold	4,500,000	5,350,000
Gross profit
Selling Expense	1,600,000	1,900,000
Administrative expense	1,300,000	1,400,000
Income from operations
Other Income	40,000	150,000
Interest expense	50,000	30,000
Income before taxes
Income taxes 25%
Net Income

Nelson Co.

Retained Earnings Statement

For the years ending

	12/31/13	12/31/14
Retained Earnings â Beg. Balance	$3,758,000
Net income
Preferred dividends
Common dividends	50,000	50,000
Retained Earnings- Ending Balance

Nelson Co.

Balance Sheet

As of

	12/31/13	12/31/14
Assets
Current Assets:
Cash	300,000	250,000
Short term investments	910,000	800,000
Account receivable	540,000	410,000
Inventory	990,000	950,000
Prepaid expenses	250,000	210,000
Total current assets
Long term investments	1,800,000	1,900,000
Land Buildings Equipment	3,240,000	3,466,000
Total Assets
Liabilities
Current Liabilities:	979,000	780,000
Long term Liabilities:
Mortgage Payable 8% due 2025	200,000	90,000
Bonds payable $5	1,400,000	1,300,000
Total Liabilities
Shareholdersâ Equity
Preferred stock $10 par 10%	500,000	500,000
Common Stock, $5 par	400,000	400,000
Retained Earning
Total shareholdersâ equity
Total Liabilities & shareholdersâ equity

Fill in the blanks on the financial statements.

coppershark967

1. Produce a balance sheet for a company that distinguishesbetween current and non-current assets and liabilities.
2. Create a balance sheet from a trial balance.
3. Create a comparison of net income based on different methods ofinventory accounting.
4. Analyze a statement of cash flows and show where each line itemcan be found or calculated from the other financialstatements.
5. Prepare a full analysis of key financial ratios for a companyand state conclusions about the financial strength of the companycompared to industry ratios.

Create a BalanceSheet from the trial balance:
		Debits	Credits	Classification

	Cash	300,000.00		Current asset

	Sales		(10,000,000.00)	Income statement

	Cost of Goods Sold	7,000,000.00		Income statement

	Selling Expenses	500,000.00		Income statement

	Other income		(50,000.00)	Income statement

	Administrative expenses	350,000.00		Income statement

	Interest Expenses	12,500.00		Income statement

	Land	300,000.00		non-current asset

	Building	2,000,000.00		non-current asset

	Long Term bond payable		(550,000.00)	non-current liability

	Accrued Liabilities		(50,000.00)	current- liability

	Accumulated Depreciation Buildings		(250,000.00)	non-current asset

	Equipment	750,000.00		non-current asset

	Receivables	100,000.00		current asset

	Allowance for doubtful accounts		(7,500.00)	current asset

	Accumulated depreciation equipment		(125,000.00)	non-current asset

	Common Stock		(200,000.00)	equity

	Payables		(115,000.00)	current Liability

	Inventories	200,000.00		current asset

	Prepaid Expenses	50,000.00		current asset

	Retained Earnings		(215,000.00)	equity



		11,562,500.00	(11,562,500.00)



Assets		Equity and Liabilities

Current Assets		Current Liabilities





Total Current Assets	-	Total Current Liabilities	-




		Total long term Liabilities	-

Total property plant and equipment	-






		Total Equity	-


Total Assets	-	Total Equity and liabilities	-

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ACCT 2001 Chapter : Chapter 2

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