Reference no: EM131569863
Part A - The following information is given for Tripp Company, which uses the indirect method.
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Net income
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$20,000
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Depreciation expense
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3,000
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Increase in accounts receivable
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2,000
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Payment of dividends
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2,000
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Proceeds from sale of equipment
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6,000
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Increase in accounts payable
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4,000
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Decrease in inventory
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3,000
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From the information provided, answer the following questions:
1. The cash flow from operating activities is
2. The cash flow from investing activities is
3. The cash flow from financing activities is
Part B - Selected data for Stick's Design are given as of December 31, Year 1 and Year 2 (rounded to the nearest hundredth).
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Year 2
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Year 1
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Net Credit Sales
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$25,000
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$30,000
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Cost of Goods Sold
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16,000
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18,000
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Net Income
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2,000
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2,800
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Cash
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5,000
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900
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Accounts Receivable
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3,000
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2,000
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Inventory
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2,000
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3,600
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Current Liabilities
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6,000
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5,000
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Compute the following:
1. Current ratio for Year 2
2. Acid-test ratio for Year 2
3. Accounts receivable turnover for Year 2
4. Average collection period for Year 2
5. Inventory turnover for Year 2
Part C - Prepare an income statement showing departmental contribution margin based on the following:
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Dept. X
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Dept. Y
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Rent Expense
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Space (square feet)
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17,500
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35,000
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Net Sales
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$60,000
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$40,000
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Cost of Goods Sold
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18,000
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16,000
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Rent Expense (allocated based on square feet)
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$2,700
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Part D - From the following transactions, prepare the appropriate general journal entries for the month of April.
1. Raw materials costing $60,000 were issued from the storeroom.
2. Direct labor of $53,000 was charged to production.
3. Indirect labor costs of $17,000 were incurred.
4. Overhead was applied at the rate of 40% of direct labor dollars.
5. Completed products costing $42,000 were transferred to finished goods.
6. Products costing $32,000 were sold.
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