07 May QuestionQuestions 1Exercise 3-4 Balance sheet preparation [LO3-2, 3-
Question
Questions 1
Exercise 3-4 Balance sheet preparation [LO3-2, 3-3]
| The following is a December 31, 2013, post-closing trial balance for the Jackson Corporation. |
| Account Title | Debits | Credits | ||
| Cash | 40,000 | |||
| Accounts receivable | 34,000 | |||
| Inventories | 75,000 | |||
| Prepaid rent | 16,000 | |||
| Marketable securities (short term) | 10,000 | |||
| Machinery | 145,000 | |||
| Accumulated depreciation—machinery | 11,000 | |||
| Patent (net of amortization) | 83,000 | |||
| Accounts payable | 8,000 | |||
| Wages payable | 4,000 | |||
| Taxes payable | 32,000 | |||
| Bonds payable (due in 10 years) | 200,000 | |||
| Common stock | 100,000 | |||
| Retained earnings | 48,000 | |||
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| Totals | 403,000 | 403,000 | ||
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| Required: |
| Prepare a classified balance sheet for Jackson Corporation at December 31, 2013. |
Questions 2
Exercise 3-12 Financial statement disclosures [LO3-4]
| Parkman Sporting Goods is preparing its annual report for its 2013 fiscal year. The company’s controller has asked for your help in determining how best to disclose information about the following items: |
| Required: |
| Indicate whether the above items should be disclosed (A) in the summary of significant accounting policies note, (B) in a separate disclosure note, or (C) on the face of the balance sheet. |
1. A related-party transaction
2. Depreciation method
3. Allowance for uncollectible account
4. Composition of investments
5. Composition of long-term debt
6. Inventory costing method
7. Number of share of common stock authorized, issued, and outstanding
8. Employee benefit plans
Question 3
Exercise 4-3 Multiple-step continuous statement of comprehensive income [LO4-1, 4-5, 4-6, 4-7]
| The trial balance for Lindor Corporation, a manufacturing company, for the year ended December 31, 2013, included the following income accounts: |
| Account Title | Debits | Credits |
| Sales revenue | 2,300,000 | |
| Gain on litigation settlement (unusual and infrequent) | 400,000 | |
| Cost of goods sold | 1,400,000 | |
| Selling and administrative expenses | 420,000 | |
| Interest expense | 40,000 | |
| Unrealized holding gains on investment securities | 80,000 | |
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| The trial balance does not include the accrual for income taxes. Lindor’s income tax rate is 30%. One million shares of common stock were outstanding throughout 2013. |
| Required: |
| Prepare a single, continuous multiple-step statement of comprehensive income for 2013, including appropriate EPS disclosures. (Amount to be deducted should be indicated with a minus sign. Round EPS answers to 2 decimal places.) |
Question 4
Exercise 4-18 Statement of cash flows; indirect method [LO4-9]
| Presented below is the 2013 income statement and comparative balance sheet information for Tiger Enterprises. |
| TIGER ENTERPRISES | ||||||
| Income Statement | ||||||
| For the Year Ended December 31, 2013 | ||||||
| ($ in thousands) | ||||||
| Sales revenue | $ | 7,000 | ||||
| Operating expenses: | ||||||
| Cost of goods sold | $ | 3,360 | ||||
| Depreciation | 240 | |||||
| Insurance | 100 | |||||
| Administrative and other | 1,800 | |||||
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| Total operating expenses | 5,500 |
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