Reference no: EM131597128
Question 1 -
Corporate Jet Inc. started its business on 1/1/2015. During 2015, the company have the following 4 transactions:
For each transaction, prepare a journal entry and classify the change in cash as Operating (O) or Investing (I) or Financing (F).
1. On Feb. 1, Issue a note of $120,000 to bank (one year, annual interest rate 3%) for cash. Interest is not paid until 2016.
2. On July 5, purchase merchandise from Maida for $33,000.
3. On August 1, sell merchandise to Lachey for $80,000 in cash.
4. On October 5, purchased a building for $100,000.
Question 2 -
Classify each of the following transactions from a)-e) as Operating (O), Investing (I) or Financing (F) and Cash inflow (IN) or cash outflow (OUT).
a. Purchase of delivery truck.
b. Issuance of bonds payable.
c. Sale of investments for no gain or loss.
d. Payment of dividends
e. Purchase of treasury stock.
Question 3 -
The income statement of Guesser Company is shown below.
|
GUESSER COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012
|
|
Sales
|
|
$755,000
|
|
Cost of goods sold
|
|
543,000
|
|
Gross profit
|
|
212,000
|
|
Operating expenses
|
|
|
|
Selling expenses
|
$52,000
|
|
|
Administrative expenses
|
89,000
|
141,000
|
|
Net income
|
|
$71,000
|
Additional information:
1. Accounts receivable decreased $63,000 during the year.
2. Inventory increased $38,000 during the year.
3. Prepaid expenses increased $12,000 during the year.
4. Accounts payable to increased $25,000 during the year.
5. Accrued expenses payable increased $6,000 during the year.
Instruction: Prepare the operating section of the cash flow statement using the direct method.
a. Cash received from customers (hint: use Sales, A/R in your calculation)
b. Cash paid to suppliers (hint: use COGS, A/P and inventory in your calculation)
c. Cash paid as Operating expenses(hint: use Operating expenses, prepaid expenses and accrued expenses in your calculation)
d. Net cash flow from operating activities (i.e. a-b-c)
Question 4 -
The income statement of Guesser Company is shown below.
|
GUESSER COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012
|
|
Sales
|
|
$755,000
|
|
Cost of goods sold
|
|
543,000
|
|
Gross profit
|
|
212,000
|
|
Operating expenses
|
|
|
|
Selling expenses
|
$52,000
|
|
|
Administrative expenses
|
89,000
|
141,000
|
|
Net income
|
|
$71,000
|
Additional information:
1. Accounts receivable decreased $63,000 during the year.
2. Inventory increased $38,000 during the year.
3. Prepaid expenses increased $12,000 during the year.
4. Accounts payable to increased $25,000 during the year.
5. Accrued expenses payable increased $6,000 during the year.
Instruction: Prepare the operating section of the cash flow statement using the indirect method. Make sure that your answer is consistent with R3. If not, you must have made a mistake.
Question 5 -
In your mini Project, you will have the following 3 Journal entries as part of your adjusting journal entries (with that said, don't forget to add them your project). The purpose of these journal entries
is to close purchase and related accounts to COGS. Insert the $amount for each of the journal entries based on transactions #2, 4, 7, 14 and 16, as well as the balance sheets from 2013 and 2014.
Attachment:- Assignment.rar