Prepare a balance sheet and statement of cash flows

Assignment Help Accounting Basics
Reference no: EM131095664

Problem 1: Multistep and common size income statements

The following information was drawn from the records of Harper Sales Company


2013 2014
Net sales $200,000 $200,000
Cost of goods sold (90,000) (80,000)
Operating expenses (60,000) (50,000)
Loss on the sale of land -0- (24,000)

Required:

a. Prepare a multistep income statement for each year.

b. Prepare a common size income statement for each year.

c. At a recent meeting of the stockholders, Harper's president stated 2015 would be a very good year with net income rising significantly.

Write a brief memo explaining whether you agree or disagree with the president. Assume that the operating trends between 2013 and 2014 continue through 2015.

Problem 2: 

Effect of purchase returns and allowances and freight costs on the -journal, ledger, and financial statements: Perpetual system

The trial balance for Austin's Auto Shop as of January 1, 2013, follows:

Account Titles Debit Credit
Cash $14,000
Inventory 7000
Common stock
18000
Retained earning
3000
Total  $21,000 21000

The following events affected the company during the 2013 accounting period:

1. Purchased merchandise on account that cost $12,000.

2. The goods in Event 1 were purchased FOB shipping point with freight cost of $800 cash.

3. Returned $2,600 of damaged merchandise for credit on account.

4. Agreed to keep other damaged merchandise for which the company received an $1,100 allowance.

5. Sold merchandise that cost $12,000 for $21,500 cash.

6. Delivered merchandise to customers in Event 5 under terms FOB destination with freight costs amounting to $500 cash.

7. Paid $8,000 on the merchandise purchased in Event 1.

Required:

a. Record the events in general journal format.

b. Open general ledger T-accounts with the appropriate beginning balances, and post the journal entries to the T-accounts.

c. Prepare an income statement, balance sheet, and statement of cash flows. (Assume that closing entries have been made.)

d. Explain why a difference does or does not exist between net income and net cash flow from operating activities.

Reference no: EM131095664

Questions Cloud

Find total original asset value : Assuming that the average duration of its assets is four years, while the average duration of its liabilities is three years, then a 5 percentage point increase in interest rates will cause the net worth of First National Bank to ______ by ______ ..
Time for you to be the symphony orchestra : When you are used to hearing music played on only one instrument, what could be more captivating than listening to a full symphony orchestra? This week, it is time for you to be the symphony orchestra, i.e., pull out all of the stops.
What is the percent regulation of the line : Find the voltage, current, real and reactive power, and the power factor at the sending end in both per unit and absolute units.
Wired and wireless technology : Review the chart in the "Networking Technologies Used for Internet Connections" section of Chapter 16. What types of technology (wireless or wired) are used in business today? Include at least two examples. Which wireless technology types do you t..
Prepare a balance sheet and statement of cash flows : Explain why a difference does or does not exist between net income and net cash flow from operating activities - Prepare an income statement, balance sheet, and statement of cash flows.
Create a budget for the set design and construction project : Create a budget for the set design and construction project. Why don't you need to take into account fringe benefit costs for the workers. Using the expected monetary value concept, calculate what contingency reserve should be set aside to deal with ..
Determine the percent regulation of the line : The sending-end Voltage, current, real and reactive powers, and the power factor.
What are the different types of listening styles : What are the different types of listening styles, and what style do you most closely identify with? Explain what your listening style is and what you have observed about how you listen.
Compare and contrast the four motivation theories : discuss the criticism of each theory. Which theory you identify with the most and why? You can identify with more than one, but it is not required. Development of idea and grammar.

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Prepare balance sheet presentation of kiner corp receivables

Kiner Corp. had the following balances in receivable accounts at October 31, 2010 (in thousands): Allowance for Doubtful Accounts $56; Accounts Receivable $2,870; Other Receivables $189; Notes Receivable $1,353.

  Video world operates a retail store that rents movie videos

video world operates a retail store that rents movie videos. for each of the last 10 years video world has consistently

  Given the journal entries below make the necessary adjusted

Given the journal entries below, make the necessary adjusted journal entries. Monica also has a shoebox of gas receipts that totals $782 for her business trips during the 6 months. Monica has done an inventory count and has $118 of supplies left in t..

  How does an executive support system differ from a decision

How does an executive support system differ from a decision support system?

  Income created during the reporting period

1.How do we report components of comprehensive income created during the reporting period?

  Description business strategy critical assignment

The capstone assignment for BUS 460, Business Strategy, is one of a series of assignments designed to demonstrate that students have achieved the learning outcomes established for the majors in the College of Business and Management.

  Incremental revenues and expenses problem

When the incremental revenues and expenses are analyzed, what is the financial impact?

  Listed are typical financial activities of a local

listed are typical financial activities of a local governmental unit.1. the legislative unit approved the budget for

  Many tax planning strategies are imbedded in provisions of

many tax planning strategies are imbedded in provisions of the tax law however tax planners and tax preparers may push

  Values for liquid assets

Their year-end financial reports for the final five years of independent operation give the following values for their liquid assets (Source: The Financial Times).

  What impact does the emphasis on special effects

What impact does the emphasis on special effects have on plot and character development?

  Is judy right about eliminating the huron division prepare

on january 2 2013 benson hospital purchased a 105164 special radiology scanner from picard inc. the scanner had a

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd