Condensed income statement wileyplus

Sheet1
Question 1
At January 1, 2017, Crane Company reported the following property, plant, and equipment accounts:
Accumulated depreciation—buildings $63,600,000
Accumulated depreciation—equipment 53,350,000
Buildings 97,400,000
Equipment 150,600,000
Land 23,900,000
The company uses straight-line depreciation for buildings and equipment, its year-end is December 31, and it makes adjustments annually. The buildings are estimated to have a 40-year useful life and no salvage value; the equipment is estimated to have a 10-year useful life and no salvage value.
During 2017, the following selected transactions occurred:
Apr. 1 Purchased land for $4.70 million. Paid $1.175 million cash and issued a 3-year, 6% note payable for the balance. Interest on the note is payable annually each April 1.
May-01 Sold equipment for $220,000 cash. The equipment cost $4.08 million when originally purchased on January 1, 2009.
Jun-01 Sold land for $4.98 million. Received $870,000 cash and accepted a 3-year, 5% note for the balance. The land cost $1.60 million when purchased on June 1, 2011. Interest on the note is due annually each June 1.
Jul-01 Purchased equipment for $2.20 million cash.
Dec. 31 Retired equipment that cost $1 million when purchased on December 31, 2007. No proceeds were received.
Prepare a tabular summary that includes the property, plant, and equipment balances as of January 1, 2017. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
Assets = Liabilities + Stockholders' Equity
Retained Earnings
Cash + Notes Rec. + Interest Rec. + Land + Buildings - Accum. Depr. - Bldgs. + Equipment - Accum. Depr. - Equip. = Interest Payable + Notes Payable + Common Stock + Revenue - Expense - Dividend
Jan. 1 $ $ $ $ $ $ $ $ $ $ $ $ $ $
Record the above transactions in the tabular summary from part (a). (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
Assets = Liabilities + Stockholders' Equity
Retained Earnings
Cash + Notes Rec. + Interest Rec. + Land + Buildings - Accum. Depr. - Bldgs. + Equipment - Accum. Depr. - Equip. = Interest Payable + Notes Payable + Common Stock + Revenue - Expense - Dividend
Jan. 1 $ $ $ $ $ $ $ $ $ $ $ $ $ $
Apr. 1
May-01
May-01
Jun-01
Jul-01
Dec. 31
Dec. 31
Record any adjustments required at December 31. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
Assets = Liabilities + Stockholders' Equity
Retained Earnings
Cash + Notes Rec. + Interest Rec. + Land + Buildings - Accum. Depr. - Bldgs. + Equipment - Accum. Depr. - Equip. = Interest Payable + Notes Payable + Common Stock + Revenue - Expense - Dividend
Jan. 1 $ $ $ $ $ $ $ $ $ $ $ $ $ $
Apr. 1
May-01
May-01
Jun-01
Jul-01
Dec. 31
Dec. 31
Dec. 31 $ $ $ $
Dec. 31
Dec. 31
Dec. 31
Prepare the property, plant, and equipment section of the company’s statement of financial position at December 31. (List Property, Plant and Equipment in order of Land, Buildings and Equipment.)
CRANE COMPANY
Statement of Financial Position (Partial)
$
$
:
:
$
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Sheet2
Question 2
On January 1, 2017, Sandhill Co.'s accounting records contained these liability accounts.
Accounts Payable $43,500
Sales Taxes Payable 7,100
Unearned Service Revenue 20,000
During January, the following selected transactions occurred.
Jan. 1 Borrowed $18,000 in cash from Apex Bank on a 4-month, 5%, $18,000 note.
5 Sold merchandise for cash totaling $5,300, which includes 6% sales taxes.
12 Performed services for customers who had made advance payments of $10,600. (Record Service Revenue.)
14 Paid state treasurer’s department for sales taxes collected in December 2016, $7,100.
20 Sold 600 units of a new product on credit at $46 per unit, plus 6% sales tax.
During January, the company’s employees earned wages of $72,900. Withholdings related to these wages were $5,577 for Social Security (FICA), $5,207 for federal income tax, and $1,562 for state income tax. The company owed no money related to these earnings for federal or state unemployment tax. Assume that wages earned during January will be paid during February. Wages or payroll tax expense have not been recorded as of January 31.
Prepare a tabular summary to record the January transactions and the adjustments on January 31 for the outstanding note payable and the salaries and wages expense and payroll tax expense. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. Round answers to 0 decimal places, e.g. 5,275.)
Assets = Liabilities + Stockholders’ Equity
Paid-in-Capital Retained Earnings
Cash + Accts. Rec. = Notes Pay. + Acct. Pay. + Salaries & Wages Pay. + Unearned Serv. Rev. + Sales Taxes Pay. + Interest Pay. + FICA Taxes Pay. + Fed. Inc. Taxes Pay. + St. Inc. Taxes Pay. + State Unemp. Taxes Pay. + Common Stock + Revenue - Expense - Dividend
Bal. $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
Jan. 1
Jan. 5
Jan. 12
Jan. 14
Jan. 20
Adj.
Jan. 31
Jan. 31
Jan. 31
Bal.
Prepare the current liabilities section of the balance sheet at January 31, 2017. Assume no change in Accounts Payable. (Round answers to 0 decimal places, e.g. 5,275.)
SANDHILL CO.
Balance Sheet (Partial)
$
$
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Sheet3
Question 3
Blue Spruce Warehouse distributes hardback books to retail stores and extends credit to all of its customers. During the month of June, the following merchandising transactions occurred.
Jun-01 Purchased books on account for $2,265 from Catlin Publishers.
3 Sold books on account to Garfunkel Bookstore for $1,000. The cost of the merchandise sold was $800.
6 Received $65 credit for books returned to Catlin Publishers.
9 Paid Catlin Publishers in full.
15 Received payment in full from Garfunkel Bookstore.
17 Sold books on account to Bell Tower for $1,000. The cost of the merchandise sold was $850.
20 Purchased books on account for $800 from Priceless Book Publishers.
24 Received payment in full from Bell Tower.
26 Paid Priceless Book Publishers in full.
28 Sold books on account to General Bookstore for $2,950. The cost of the merchandise sold was $830.
30 Granted General Bookstore $120 credit for books returned costing $60.
Prepare a tabular summary to record the transactions for the month of June for Blue Spruce Warehouse using a perpetual inventory system. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Assets = Liabilities + Stockholders' Equity
Retained Earnings
Cash + Accts. Rec. + Inv. = Accts. Pay. + Common Stock + Rev. - Exp.
June 1 $ $ $ $ $ $ $
3
6
9
15
17
20
24
26
28
30
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Sheet4
Question 4
Nona Curry started her own consulting firm, Larkspur, Inc., on May 1, 2017. The following transactions occurred during the month of May.
May-01 Stockholders invested $18,150 cash in the business in exchange for common stock.
2 Paid $726 for office rent for the month.
3 Purchased $605 of supplies on account.
5 Paid $182 to advertise for the month in the County News.
9 Received $1,694 cash for services performed.
12 Paid $242 cash dividend.
15 Performed $5,082 of services on account.
17 Paid $3,025 for employee salaries.
20 Paid for the supplies purchased on account on May 3.
23 Received a cash payment of $1,452 for services performed on account on May 15.
26 Borrowed $6,050 from the bank on a note payable.
29 Purchased office equipment for $2,420 paying $242 in cash and the balance on account.
30 Paid $218 for utilities.
Show the effects of the above transactions on the accounting equation using the following format. Assume the note payable is to be repaid within the year. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.)
LARKSPUR, INC.
Assets = Liabilities + Stockholders’ Equity
Date Cash + Accounts Receivable + Supplies + Equipment = Notes Payable + Accounts Payable + Common Stock + Retained Earnings
Revenues – Expenses – Dividends
May-01 $ $ $
May-02 Rent Expense
May-03
May-05 Advertising Expense
May-09 Service Revenue
May-12 Dividends
May-15 Service Revenue
May-17 Salaries and Wages Expense
May-20
May-23
May-26
May-29
May-30 Utilities Expense
$ $ $ $ = $ $ $ $ $ $
Prepare an income statement for the month of May 2017.
LARKSPUR, INC.
Income Statement
$
$
$
Prepare a retained earnings statement for the month of May 2017.
LARKSPUR, INC.
Retained Earnings Statement
$
:
:
$
Prepare a classified balance sheet at May 31, 2017. (List current assets in order of liquidity)
LARKSPUR, INC.
Balance Sheet
Assets
$
$
$
Liabilities and Stockholders' Equity
$
$
$
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Sheet5
Question 5
Ayayai Distribution markets CDs of numerous performing artists. At the beginning of March, Ayayai had in beginning inventory 2,490 CDs with a unit cost of $7. During March, Ayayai made the following purchases of CDs.
Mar-05 1,910 @ $8 Mar-21 4,880 @ $10
Mar-13 3,760 @ $9 Mar-26 2,050 @ $11
During March 12,560 units were sold. Ayayai uses a periodic inventory system.
Determine the cost of goods available for sale.
The cost of goods available for sale $
Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). (For calculation purposes, round average cost to 3 decimal places, e.g. 5.275. Round answers to 0 decimal places, e.g. 125.)
FIFO LIFO AVERAGE-COST
The ending inventory $ $ $
The cost of goods sold $ $ $
Which cost flow method results in (1) the highest inventory amount for the balance sheet and (2) the highest cost of goods sold for the income statement?
-1
produces the highest inventory amount.
-2
produces the highest cost of goods sold.
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Sheet6
Question 6
The comparative statements of Oriole Company are presented here.
ORIOLE COMPANY
Income Statements
For the Years Ended December 31
2017 2016
Net sales $1,897,940 $1,757,900
Cost of goods sold 1,065,940 1,013,400
Gross profit 832,000 744,500
Selling and administrative expenses 507,400 486,400
Income from operations 324,600 258,100
Other expenses and losses
Interest expense 23,700 21,700
Income before income taxes 300,900 236,400
Income tax expense 93,700 74,700
Net income $ 207,200 $ 161,700
ORIOLE COMPANY
Balance Sheets
Dec-31
Assets 2017 2016
Current assets
Cash $ 60,100 $ 64,200
Debt investments (short-term) 74,000 50,000
Accounts receivable 125,200 110,200
Inventory 127,700 117,200
Total current assets 387,000 341,600
Plant assets (net) 659,000 530,300
Total assets $1,046,000 $871,900
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $ 167,400 $152,800
Income taxes payable 45,200 43,700
Total current liabilities 212,600 196,500
Bonds payable 230,000 210,000
Total liabilities 442,600 406,500
Stockholders’ equity
Common stock ($5 par) 290,000 300,000
Retained earnings 313,400 165,400
Total stockholders’ equity 603,400 465,400
Total liabilities and stockholders’ equity $1,046,000 $871,900
All sales were on account. Net cash provided by operating activities for 2017 was $245,000. Capital expenditures were $136,000, and cash dividends were $59,200.
Compute the following ratios for 2017. (Round current ratio, earnings per share and asset turnover to 2 decimal places, e.g 1.83 and all other answers to 1 decimal place, e.g. 1.8 or 2.5%. Use 365 days in calculation.)
(a) Earnings per share $
(b) Return on common stockholders’ equity %
(c) Return on assets %
(d) Current ratio :1
(e) Accounts receivable turnover times
(f) Average collection period days
(g) Inventory turnover times
(h) Days in inventory days
(i) Times interest earned times
(j) Asset turnover times
(k) Debt to assets ratio %
(l) Free cash flow $
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