ACFI1001 Lecture Notes - Lecture 4: Gross Profit, Financial Statement, Income Statement
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IKIBAN INC. | ||||||||
2015 | 2014 | |||||||
Assets | ||||||||
Cash | $ | 96,500 | $ | 56,200 | ||||
Accounts receivable, net | 69,300 | 51,400 | ||||||
Inventory | 66,600 | 96,800 | ||||||
Prepaid expenses | 5,100 | 6,400 | ||||||
Total current assets | 237,500 | 210,800 | ||||||
Equipment | 135,200 | 120,000 | ||||||
Accum. depreciationâEquipment | (28,900 | ) | (10,500 | ) | ||||
Total assets | $ | 343,800 | $ | 320,300 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 26,900 | $ | 32,200 | ||||
Wages payable | 7,100 | 16,700 | ||||||
Income taxes payable | 2,500 | 4,100 | ||||||
Total current liabilities | 36,500 | 53,000 | ||||||
Notes payable (long term) | 42,000 | 70,000 | ||||||
Total liabilities | 78,500 | 123,000 | ||||||
Equity | ||||||||
Common stock, $5 par value | 240,000 | 189,000 | ||||||
Retained earnings | 25,300 | 8,300 | ||||||
Total liabilities and equity | $ | 343,800 | $ | 320,300 | ||||
IKIBAN INC. | ||||||
Sales | $ | 673,000 | ||||
Cost of goods sold | 407,000 | |||||
Gross profit | 266,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 53,000 | ||||
Other expenses | 66,900 | |||||
Total operating expenses | 119,900 | |||||
| 146,100 | |||||
Other gains (losses) | ||||||
Gain on sale of equipment | 2,600 | |||||
Income before taxes | 148,700 | |||||
Income taxes expense | 59,480 | |||||
Net income | $ | 89,220 | ||||
a. A $28,000 note payable is retired at its $28,000 carrying (book) value in exchange for cash.
b. The only changes affecting retained earnings are net income and cash dividends paid.
c. New equipment is acquired for $63,800 cash.
d. Received cash for the sale of equipment that had cost $48,600, yielding a $2,600 gain.
e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
f. All purchases and sales of inventory are on credit.
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(2) Compute the company's cash flow on total assets ratio for its fiscal year 2015.
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.)
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