Question ACC 421 Week 4 Wiley Plus Assignment – Exercises

29 Jun Question ACC 421 Week 4 Wiley Plus Assignment – Exercises

Question

ACC 421 Week 4 Wiley Plus Assignment – Exercises

Problem 1

The income statement of Rodriquez Company is shown below.

RODRIQUEZ COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2012

Sales

$6,894,600

Cost of goods sold

Beginning inventory

$1,893,870

Purchases

4,375,530

Goods available for sale

6,269,400

Ending inventory

1,608,650

Cost of goods sold

4,660,750

Gross profit

2,233,850

Operating expenses

Selling expenses

440,640

Administrative expenses

703,840

1,144,480

Net income

$1,089,370

Additional information:

1.

Accounts receivable decreased $312,690 during the year.

2.

Prepaid expenses increased $178,550 during the year.

3.

Accounts payable to suppliers of merchandise decreased $281,970 during the year.

4.

Accrued expenses payable decreased $124,510 during the year.

5.

Administrative expenses include depreciation expense of $55,760.

Prepare the operating activities section of the statement of cash flows using the direct method.

Problem 2

Presented below are two independent situations.

Situation A:
Chenowith Co. reports revenues of $200,680 and operating expenses of $110,380 in its first year of operations, 2012. Accounts receivable and accounts payable at year-end were $79,260 and $40,870, respectively. Assume that the accounts payable related to operating expenses. Ignore income taxes.

Using the direct method, compute net cash provided (used) by operating activities.(If an amount reduces the account balance then enter with negative sign.)

Net cash by operating activities

$

Situation B:
The income statement for Edgebrook Company shows cost of goods sold $307,650 and operating expenses (exclusive of depreciation) $231,760. The comparative balance sheet for the year shows that inventory increased $21,380, prepaid expenses decreased $7,680, accounts payable (related to merchandise) decreased $15,450, and accrued expenses payable increased $13,950.

Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.

(a)

Cash payments to suppliers

$

(b)

Cash payments for operating expenses

$

Problem 3

Condensed financial data of Fairchild Company for 2012 and 2011 are presented below.

FAIRCHILD COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2012 AND 2011

2012

2011

Cash

$1,801

$1,091

Receivables

1,757

1,301

Inventory

1,594

1,900

Plant assets

1,897

1,707

Accumulated depreciation

(1,205

)

(1,170

)

Long-term investments (held-to-maturity)

1,299

1,462

$7,143

$6,291

Accounts payable

$1,207

$796

Accrued liabilities

203

245

Bonds payable

1,418

1,631

Common stock

1,893

1,706

Retained earnings

2,422

1,913

$7,143

$6,291

FAIRCHILD COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2012

Sales

$6,851

Cost of goods sold

4,691

Gross margin

2,160

Selling and administrative expenses

930

Income from operations

1,230

Other revenues and gains

Gain on sale of investments

82

Income before tax

1,312

Income tax expense

531

Net income

$781

Additional information:

During the year, $78 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $272.

Prepare a statement of cash flows using the indirect method.(If an amount reduces the account balance then enter with negative sign.)

Problem 4

Condensed financial data of Fairchild Company for 2012 and 2011 are presented below.