During the year, Hepworth Company earned a net income of $85,025. Beginning and ending balances for the year for selected accounts are as follows: Account Beginning Ending Cash $106,000 $125,100 Accounts receivable 67,200 99,250 Inventory 36,100 52,700 Prepaid expenses 26,700 30,600 Accumulated depreciation 81,300 90,800 Accounts payable 45,800 56,025 Wages payable 27,400 14,300 There were no financing or investing activities for the year. The above balances reflect all af the adjustments needed to adjust net income to operating cash flows. Required: 1. Prepare a schedule of operating cash flows using the indirect method 2. Suppose that all the data used in Requirement 1 except the ending accounts payable and cash balances are not known. Assume aiso that you know that the operating cash flow for the year was $20,275. What is the ending balance of accounts payable? 3. Conceptual Connection: Hepworth has an opportunity to buy some equipment that will significantly increase productivity. The equipment costs $25,000. Assuming exacthy the same data used for Requirement 1, can Hepworth bugy the equipment using this year's operating cash flows? Refer to the list beklow for the exact wording of an amount description within your Statement of Cash Flows. Amount Descriptions Decrease in accounts payable
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
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Please use the accounts descriptions from the attached sheet for the worksheet. thanks
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