28 Jun Accounting help
Exercise 1
| Exercise #1 | |
| Cash flows | |
| Examine the listed business activities and decide if each is to be classified as a: | |
| O | Cash flow from operating activity |
| I | Cash flow from investing activity |
| F | Cash flow from financing activity |
| NC | Non-cash investing/financing activity |
| +/- | inflows and outflows |
| F + | Example isue bonds payable |
| (a) | Issue common stock for land |
| (b) | Issue common stock for cash |
| (c) | Pay interest on loan |
| (d) | Sell goods for cash |
| (e) | Pay employee salaries |
| (f) | Pay dividends to common shareholders |
| (g) | Receive dividend on an investment |
| (h) | Obtain proceeds of long-term loan |
| (i) | Acquire treasury shares |
| (j) | Purchase land for cash |
| (k) | Buy inventory for resale |
Exercise 2
| Exercise #2 | |||||
| Ozark Corporation reported net income of $100,000 for 20X5. The income statement revealed sales of | |||||
| $1,000,000; gross profit of $520,000; selling and administrative costs of $340,000; interest expense of | |||||
| $20,000; and income taxes of $60,000. | |||||
| The selling and administrative expenses included $25,000 for depreciation. No equipment was sold | |||||
| during the year. Equipment purchases were made with cash. Prepaid insurance included in the balance | |||||
| sheet related to administrative costs. All accounts payable included in the balance sheet relate to | |||||
| inventory purchases. The change in retained earnings is attributable to net income and dividends. The | |||||
| increase in common stock and additional paid-in capital is due to issuing additional shares for cash. | |||||
| Using the indirect approach, prepare a statement of cash flows for Ozark for the year ending December 31, 20X5. Comparative balance sheets for Ozark follow. | |||||
| OZARK CORPORATION | |||||
| Balance Sheet | |||||
| December 31, 20X4 and 20X5 | |||||
| OZARK CORPORATION | |||||
| Assets | 20X5 | 20X4 | Change | Statement of Cash Flows (Indirect Approach) | |
| Cash | 458,700 | 471,450 | (12,750) | For the Year Ending December 31, 20X5 | |
| Accounts receivable | 199,250 | 171,500 | |||
| Inventories | 248,600 | 278,800 | Cash flows from operating activities: | ||
| Prepaid insurance | 13,000 | 11,000 | Net income | $ – | |
| Land | 250,000 | 250,000 | Add (deduct) noncash effects on operating income | ||
| Building and equipment | 1,500,000 | 1,300,000 | Depreciation expense | $ – | |
| Less: Accumulated depreciation | (205,000) | (180,000) | Increase in accounts receivable | – | |
| Total assets | 2,464,550 | 2,302,750 | Decrease in inventory | – | |
| Increase in prepaid insurance | – | ||||
| Liabilities | Decrease in accounts payable | – | |||
| Accounts payable | 85,700 | 93,400 | Decrease in interest payble | – | |
| Interest payable | 10,500 | 15,000 | Increase in income taxes payable | – | – |
| Income taxes payable | 22,000 | 8,000 | Net cash provided by operating activities | $ – | |
| Stockholders’ equity | |||||
| Common stock | 710,000 | 700,000 | Cash flows from investing activities: | ||
| Paid in capital in excess of par | 990,000 | 900,000 | Purchase of equipment | $ – | |
| Retained earnings | 646,350 | 586,350 | Net cash used by investing activities | – | |
| Total liabilities and equity | 2,464,550 | 2,302,750 | |||
| Cash flows from financing activities: | |||||
| Proceeds from issuing stock | $ – | ||||
| Dividends on common | – | ||||
| Net cash provided by financing activities | – | ||||
| Net decrease in cash | $ – | ||||
| Cash balance at January 1, 20X5 | – | ||||
| Cash balance at December 31, 20X5 | $ – |
Exercise 3
| Exercise #3 | ||||
| Identify where each of the following items would be reported in the financial statements. | ||||
| CA | 1 | Cash | example | |
| 2 | Loss on sale of investments in stock. | Balance sheet | ||
| 3 | Unrealized gain on non-trading securities. | CA | Current assets | |
| 4 | Fair value adjustment—trading | CL | Current liabilities | |
| 5 | Interest earned on investments in bonds. | INV | Investments | |
| 6 | Unrealized loss on trading securities | LTL | Long-term liabilities | |
| 7 | Bonds payable | PPE | Property, plant, and equipment | |
| 8 | Accumulated depreciation | greater than one year | SE | Stockholders’ equity |
| 9 | Receivables | due in one month | IA | Intangible assets |
| 10 | Payables | Income statement | ||
| 11 | Interest earned on investments in bonds. | ORG | Other revenues and gains | |
| 12 | Patent | OEL | Other expenses and losses | |
| 13 | Investments in bonds. | |||
| 14 | Unrealized gain on Available for sale securities | OCI | Other comprehensive income | |
| 15 | Copyright | |||
| 16 | Building | |||
| 17 | Mortgage | |||
| 18 | Note payable | due in one month |
Exercise 4
| Exercise #4 | |
| Presented below are long-term liability items for Suarez Company at December 31, 2014. | |
| Prepare the long-term liabilities section of the balance sheet for Suarez Company. | |
| Bonds payable, due 2016 | |
| $500,000 | |
| Mortgage liability | due in one year $45,000 |
| 560,000 | total |
| Notes payable, due 2019 | |
| 80,000 | |
| Discount on bonds payable | |
| 42,000 |
Exercise 5
| Exercise #5 | |||||
| Twin Oak Corp has the following comparative balance sheet data. | |||||
| Twin Oak Corp | |||||
| Balance Sheet | |||||
| December 31 | |||||
| 2014 | 2013 | 2012 | |||
| Cash | $ 25,000 | $ 20,000 | $ 18,000 | ||
| Receivables (net) | 50,000 | 45,000 | 48,000 | ||
| Prepaid Insurance | 90,000 | 95,000 | 64,000 | ||
| LT Investments | 75,000 | 70,000 | 45,000 | ||
| Plant and equipment (net) | 400,000 | 370,000 | 358,000 | ||
| $640,000 | $600,000 | $533,000 | |||
| Current liabilities | $ 70,000 | $ 75,000 | $ 70,000 | ||
| Long-term debt | 80,000 | 85,000 | 50,000 | ||
| Common stock, $10 par | 345,000 | 315,000 | 300,000 | outstanding shares average | |
| Retained Earnings | 145,000 | 125,000 | 113,000 | 33,000 | shares |
| $640,000 | $600,000 | $533,000 | |||
| Twin Oak Corp | |||||
| Income Statement | |||||
| For the Year Ended December 31 | |||||
| 2014 | 2013 | ||||
| Sales revenue | $740,000 | $700,000 | |||
| Less: Sales returns and allowances | 40,000 | 60,000 | |||
| Net sales | 700,000 | 640,000 | |||
| Cost of goods sold | 420,000 | 400,000 | |||
| Gross profit | 280,000 | 240,000 | |||
| Operating expenses (including income taxes) | 238,000 | 208,000 | |||
| Net income | $42,000 | $32,000 | |||
| Additional information: | |||||
| The market price of the common stock was: | $5.50 | for 2012 | |||
| $7.25 | for 2013 | ||||
| $8.15 | for 2014 | ||||
| All dividends are paid in cash | |||||
| Compute for 2014 | |||||
| Compute for 2013 | 1 | Profit margin | |||
| 1 | Profit margin | 2 | gross profit rate | ||
| 2 | gross profit rate | 3 | A/R turnover | ||
| 3 | A/R turnover | 4 | Inv turnover | ||
| 4 | Inv turnover | 5 | EPS | ||
| 5 | EPS | 6 | PE ratio | ||
| 6 | PE ratio | 7 | debt to total assets | ||
| 7 | debt to total assets | 8 | return on common equity | ||
| 8 | return on common equity | 9 | current ratio | ||
| 9 | current ratio | 10 | quick ratio | ||
| 10 | quick ratio | ||||
| Based on these ratios discuss the financial position of Twin Oak Corp |
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.