ACCT 2001 Chapter : Ch 02 Study Guide HERO

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azuremammoth471

15 Mar 2019

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Chapter 2: a further look at the financial statements. Assets that companies expect to convert to cash or use up within one year or the operating cycle, whichever is longer. Cash, investments, receivables (accounts receivable, notes receivable, and interest receivable), inventories, prepaid expenses (insurance and supplies) Note: current assets are listed on the balance sheet in the order when they are expected to be converted into cash. (order of liquidity) The average time required to purchase inventory, sell it on account, and then collect cash from customers- that is, go from cash to cash. Assets that can be converted into cash, but whose conversion is not expected within one year. Assets not intended for use within the business. Assets with relatively long useful lives that are currently used in operating the business. Investments of stocks and bonds of other corporations. The allocation of the cost of an asset to a number of years.

Related Questions

In the blank next to each account, write the letter indicatingto which category of the Classified Balance Sheet it wouldbelong.

A. Current Assets E. Current Liabilities

B. Long-Term Investments F. Long-Term Liabilities

C. Property, Plant, and Equipment G. Stockholdersâ Equity

D. Intangible Assets H. Not on the Balance Sheet

Accumulated Depreciation
Common Stock
Building (used in operations)
Salaries Payable
Land (not used in operations)
Inventory
Unearned Revenue
Depreciation Expense
Dividends
Patents
Prepaid Rent
Mortgage Payable (due 2020)
Salaries Expense
Short-Term Debt investment
Income Tax Payable
Goodwill

erinturtle874

A comparative balance sheet and income statement for Groton Company follow:

Groton Company Comparative Balance Sheet December 31, 2011 and 2010
	2011		2010
Assets
Cash	$	1	$	12
Accounts receivable		306		229
Inventory		158		196
Prepaid expenses		8		6

Total current assets		473		443

Property, plant, and equipment		509		430
Less accumulated depreciation		(85)		(71)

Net property, plant, and equipment		424		359

Long-term investments		25		32

Total assets	$	922	$	834

Liabilities and Stockholders' equity
Accounts payable	$	301	$	225
Accrued liabilities		70		80
Income taxes payable		72		63

Total current liabilities		443		368
Bonds payable		198		172

Total liabilities		641		540

Common stock		163		202
Retained earnings		118		92

Total stockholdersâ equity		281		294

Total liabilities and stockholders' equity	$	922	$	834

Groton Company Income Statement For the Year Ended December 31, 2011
Sales			$	754
Cost of goods sold				448

Gross margin				306
Selling and administrative expenses				222

Net operating income				84
Non operating items:
Gain on sale of investments	$	6
Loss on sale of equipment		(2)		4

Income before taxes				88
Income taxes				23

Net income			$	65

During 2011, Groton sold some equipment for $19 that had cost $31 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $13 that had cost $7 when purchased several years ago. A cash dividend was paid during 2011 and the company repurchased $39 of its own stock. Groton did not retire any bonds during 2011.

greyrat385

PROBLEM 14-7 Prepare a statement of Cash Flows (L014-1, L014-2] Comparative financial statements for Weaver Company follow Weaver Company Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Assets Cash ........ 340 484 Accounts receivable ................. Inventory ........................... Prepaid expenses ..................... Total current assets .................... Property, plant, and equipment ........... Less accumulated depreciation ......... Net property, plant, and equipment ....... Long-term investments .......... Total assets ..... *******41118 8801981123382982513 $ Liabilities and Stockholders' Equity Accounts payable ... Accrued liabilities Income taxes payable ......... Total current liabilities ........ Bonds payable .................. Total liabilities ........................ Common stock ....................... Retained earnings ................... Total stockholders' equity .............. Total liabilities and stockholders' equity .... 310 700 210 107 Weaver Company Income Statement For the Year Ended December 31, 2014 $800 500 300 213 Sales ......... Cost of goods sold .................. Gross margin ........... Selling and administrative expenses ..... Net operating income ....... Nonoperating items: Gain on sale of investments ......... Loss on sale of equipment .......... Income before taxes ................. Income taxes . . . . . . . . . ... Net income ...................... During 2014, Weaver sold some equipment for $20 that had cost $40 and on which there was accumulated depreciation of $16. In addition, the company sold long-term investments for $10 that had cost $3 when purchased several years ago. A cash dividend was paid during 2014 and the company repurchased $40 of its own stock. Weaver did not retire any bonds dur- ing 2014 Required: 1. Using the indirect method, determine the net cash provided by operating activities for 2014. 2. Using the information in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for 2014.

ACCT 2001 Chapter : Ch 02 Study Guide HERO

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