ACC 421 Week 4 Wiley Plus Assignment – Exercises

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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.






















































































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





2012




2011



Cash




$1,803





$1,095




Receivables




1,755





1,291




Inventory




1,581





1,910




Plant assets




1,893





1,708




Accumulated depreciation




(1,194



)




(1,163



)



Long-term investments (held-to-maturity)




1,299






1,475







$7,137






$6,316













Accounts payable




$1,205





$789




Accrued liabilities




213





235




Bonds payable




1,411





1,649




Common stock




1,898





1,692




Retained earnings




2,410






1,951







$7,137






$6,316
















































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



Sales




$6,828



Cost of goods sold




4,694



Gross margin




2,134



Selling and administrative expenses




935



Income from operations




1,199



Other revenues and gains





Gain on sale of investments




80



Income before tax




1,279



Income tax expense




547



Net income




$732


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 $273.

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

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