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Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accun. depreciation-Equipment $ 64,900 Be,870 290,656 1,310 437,736 147,500 (41,625) $ 543,611 $ 83,500 60,625 261, Be0 2,095 408,020 118,000 (51,000) $ 475,020 Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities $ 63,141 13,000 76,141 6e,000 136,141 $ 129,675 8,e00 137,675 58,750 196,425 Equity Connon stock, $5 par value Paid-in capital in excess of par, connon stock Retained earnings Total liabilities and equity 177,750 52,500 177, 220 $ 543,611 160, 250 118,345 $ 475,020 FORTEN COMPANY Incone Statement For Current Year Ended Decenber 31 $ 632,500 295,000 337,500 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense other expenses Other gains (losses) Loss on sale of equipment Income before taxes $ 30,750 142,400 173,150 (15,125) 149,225 38,250 $ 110,975 Income taxes expense Net income Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $15,125 (detalls in b). b. Sold equipment costing $76,875. with accumulated depreciation of $40125, for $21,625 cash. c. Purchased equlpment costing $106,375 by paying $50,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,000 cash by signing a short-term note payable. e. Pald $55,125 cash to reduce the long-term notes payable. f. Issued 3,500 shares of common stock for $20 cash per share. g. Declared and pald cash dividends of $52,100.

Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accun. depreciation-Equipment $ 64,900 Be,870 290,656 1,310 437,736 147,500 (41,625) $ 543,611 $ 83,500 60,625 261, Be0 2,095 408,020 118,000 (51,000) $ 475,020 Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities $ 63,141 13,000 76,141 6e,000 136,141 $ 129,675 8,e00 137,675 58,750 196,425 Equity Connon stock, $5 par value Paid-in capital in excess of par, connon stock Retained earnings Total liabilities and equity 177,750 52,500 177, 220 $ 543,611 160, 250 118,345 $ 475,020 FORTEN COMPANY Incone Statement For Current Year Ended Decenber 31 $ 632,500 295,000 337,500 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense other expenses Other gains (losses) Loss on sale of equipment Income before taxes $ 30,750 142,400 173,150 (15,125) 149,225 38,250 $ 110,975 Income taxes expense Net income Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $15,125 (detalls in b). b. Sold equipment costing $76,875. with accumulated depreciation of $40125, for $21,625 cash. c. Purchased equlpment costing $106,375 by paying $50,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,000 cash by signing a short-term note payable. e. Pald $55,125 cash to reduce the long-term notes payable. f. Issued 3,500 shares of common stock for $20 cash per share. g. Declared and pald cash dividends of $52,100.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assets $ 64,900 88,878 $ 83,5ee 68,625 261,8e0 Cash Accounts receivable Inventory Prepaid expenses 298,656 1,310 437,736 147,500 2,095 408,e20 118,e00 Total current assets Equipment Accum. depreciation-Equipment (41,625) $ 543,611 (51,e00) $ 475,020 Total assets Liabilities and Equity Accounts payable Short-term notes payable $ 63,141 13,000 76,141 6e,000 136,141 $ 129,675 8,e0e Total current liabilities 137,675 58,750 Long-term notes payable Total liabilities 196,425 Equity Connon stock, $5 par value Paid-in capital in excess of par, connon stock Retained earnings 160, 250 76 , 77ב 52,500 177,220 118,345 $ 475,020 Total liabilities and equity $ 543,611 FORTEN COMPANY Incone Statement For Current Year Ended Decenber 31 Sales $ 632,500 Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Other gains (losses) Loss on sale of equipment 295,eee 337,5ee $ 30,75e 142,480 173,158 (15,125) 149.225 38,250 $ 110,975 Income before taxes Income taxes expense Net income Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $15,125 (detalls In by. b. Sold equipment costing $76,875. with accumulated depreclation of $40125. for $21,625 cash. c. Purchased equlpment costing $106,375 by paylng $50,000 cash and signing a long-term note payable for the balance. d. Borrowed $5.000 cash by signing a short-term note payable. e. Pald $55,125 cash to reduce the long-term notes payable. f. Issued 3,500 shares of common stock for $20 cash per share. g. Declared and pald cash dividends of $52,100. Required: 1. Prepare a complete statement of cash flows using the Indirect method for the current year. (Amounts to be deducted should be Indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Net loss 110,975 Adjustments to reconcile net income to net cash provided by operations: 30,750 (20,245) Depreciation expense Accounts receivable increase Inventory increase (28,858) Prepaid expense decrease 785 Accounts payable decrease Loss on disposal of equipment (88,534) 15,125 Net cash provided by operating activities 42,000 Cash flows from investing activities Cach naid fnr anuinmant
Transcribed Image Text:Assets $ 64,900 88,878 $ 83,5ee 68,625 261,8e0 Cash Accounts receivable Inventory Prepaid expenses 298,656 1,310 437,736 147,500 2,095 408,e20 118,e00 Total current assets Equipment Accum. depreciation-Equipment (41,625) $ 543,611 (51,e00) $ 475,020 Total assets Liabilities and Equity Accounts payable Short-term notes payable $ 63,141 13,000 76,141 6e,000 136,141 $ 129,675 8,e0e Total current liabilities 137,675 58,750 Long-term notes payable Total liabilities 196,425 Equity Connon stock, $5 par value Paid-in capital in excess of par, connon stock Retained earnings 160, 250 76 , 77ב 52,500 177,220 118,345 $ 475,020 Total liabilities and equity $ 543,611 FORTEN COMPANY Incone Statement For Current Year Ended Decenber 31 Sales $ 632,500 Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Other gains (losses) Loss on sale of equipment 295,eee 337,5ee $ 30,75e 142,480 173,158 (15,125) 149.225 38,250 $ 110,975 Income before taxes Income taxes expense Net income Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $15,125 (detalls In by. b. Sold equipment costing $76,875. with accumulated depreclation of $40125. for $21,625 cash. c. Purchased equlpment costing $106,375 by paylng $50,000 cash and signing a long-term note payable for the balance. d. Borrowed $5.000 cash by signing a short-term note payable. e. Pald $55,125 cash to reduce the long-term notes payable. f. Issued 3,500 shares of common stock for $20 cash per share. g. Declared and pald cash dividends of $52,100. Required: 1. Prepare a complete statement of cash flows using the Indirect method for the current year. (Amounts to be deducted should be Indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Net loss 110,975 Adjustments to reconcile net income to net cash provided by operations: 30,750 (20,245) Depreciation expense Accounts receivable increase Inventory increase (28,858) Prepaid expense decrease 785 Accounts payable decrease Loss on disposal of equipment (88,534) 15,125 Net cash provided by operating activities 42,000 Cash flows from investing activities Cach naid fnr anuinmant
Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $15.125 (detalls In bj. b. Sold equlpment costing $76,875. with accumulated depreclation of $40125, for $21,625 cash. c. Purchased equipment costing $106,375 by paylng $50,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,000 cash by signing a short-term note payable. e. Pald $55.125 cash to reduce the long-term notes payable. f. Issued 3,500 shares of common stock for $20 cash per share. g. Declared and pald cash dividends of $52,100. Required: 1. Prepare a complete statement of cash flows using the Indirect method for the current year. (Amounts to be deducted should be Indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Net loss 110,975 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense 30,750 Accounts receivable increase (20,245) Inventory increase (28,858) Prepaid expense decrease 785 Accounts payable decrease (88,534) Loss on disposal of equipment 15,125 Net cash provided by operating activities Cash flows from investing activities Cash paid for equipment 42,000 Cash received from sale of equipment Net cash provided by investing activities Cash flows from financing activities: Cash borrowed on short-term note Cash paid on long-term note Cash received from issuing stock Cash paid for dividends Net increase (decrease) in cash Cash balance at December 31, prior year 42,000 Cash balance at December 31, current year 42,000
Transcribed Image Text:Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $15.125 (detalls In bj. b. Sold equlpment costing $76,875. with accumulated depreclation of $40125, for $21,625 cash. c. Purchased equipment costing $106,375 by paylng $50,000 cash and signing a long-term note payable for the balance. d. Borrowed $5,000 cash by signing a short-term note payable. e. Pald $55.125 cash to reduce the long-term notes payable. f. Issued 3,500 shares of common stock for $20 cash per share. g. Declared and pald cash dividends of $52,100. Required: 1. Prepare a complete statement of cash flows using the Indirect method for the current year. (Amounts to be deducted should be Indicated with a minus sign.) FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities Net loss 110,975 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense 30,750 Accounts receivable increase (20,245) Inventory increase (28,858) Prepaid expense decrease 785 Accounts payable decrease (88,534) Loss on disposal of equipment 15,125 Net cash provided by operating activities Cash flows from investing activities Cash paid for equipment 42,000 Cash received from sale of equipment Net cash provided by investing activities Cash flows from financing activities: Cash borrowed on short-term note Cash paid on long-term note Cash received from issuing stock Cash paid for dividends Net increase (decrease) in cash Cash balance at December 31, prior year 42,000 Cash balance at December 31, current year 42,000
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