ACC421 Intermediate Financial Accounting Assignment Problem

Assignment Help Financial Accounting
Reference no: EM132447682

ACC421 Intermediate Financial Accounting Assignment Help and Solution, University of Phoenix, USA

Question - Sage Inc., a greeting card company, had the following statements prepared as of December 31, 2017.

SAGE INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016

 

12/31/17

12/31/16

Cash

$5,900

$6,900

Accounts receivable

61,400

51,200

Short-term debt investments (available-for-sale)

34,700

18,000

Inventory

40,200

59,700

Prepaid rent

5,000

4,100

Equipment

152,700

130,200

Accumulated depreciation-equipment

(35,400)

(25,000)

Copyrights

45,700

49,900

Total assets

$310,200

$295,000

 

 

 

Accounts payable

$46,300

$40,400

Income taxes payable

3,900

6,000

Salaries and wages payable

8,100

3,900

Short-term loans payable

8,100

10,100

Long-term loans payable

60,200

69,400

Common stock, $10 par

100,000

100,000

Contributed capital, common stock

30,000

30,000

Retained earnings

53,600

35,200

Total liabilities & stockholders' equity

$310,200

$295,000

 

SAGE INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017

Sales revenue

 

$335,075

Cost of goods sold

 

175,200

Gross profit

 

159,875

Operating expenses

 

120,100

Operating income

 

39,775

Interest expense

$11,400

 

Gain on sale of equipment

2,000

9,400

Income before tax

 

30,375

Income tax expense

 

6,075

Net income

 

$24,300

Additional information -

1. Dividends in the amount of $5,900 were declared and paid during 2017.

2. Depreciation expense and amortization expense are included in operating expenses.

3. No unrealized gains or losses have occurred on the investments during the year.

4. Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2017.

Required - Prepare a statement of cash flow using the direct method.

Reference no: EM132447682

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