od Part 1 is top half of Statement of Cash Flows and Part 2 is the bottom bottom half
od Part 1 is top half of Statement of Cash Flows and Part 2 is the bottom bottom half
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Natalie has prepared the
COOKIE & COFFEE CREATIONS INC. Balance Sheet October 31, |
||||||
---|---|---|---|---|---|---|
Assets | 2023 | 2022 | ||||
Cash
|
$29,074 | $11,550 | ||||
|
3,250 | 2,710 | ||||
Inventory
|
7,897 | 7,450 | ||||
Prepaid expenses
|
5,800 | 6,050 | ||||
Equipment
|
102,000 | 75,500 | ||||
|
(25,200) | (9,100) | ||||
Total assets
|
$122,821 |
|
$94,160 |
|
||
Liabilities and |
2018 | 2017 | ||||
Accounts payable
|
$1,150 | $2,450 | ||||
Income taxes payable
|
9,251 | 7,200 | ||||
Dividends payable
|
27,000 | 27,000 | ||||
Salaries and wages payable
|
7,250 | 1,280 | ||||
Interest payable
|
188 | 0 | ||||
Note payable
|
10,000 | 0 | ||||
|
15,000 | 14,000 | ||||
Common stock, $1 par—25,930 shares issued and outstanding
|
25,930 | 25,930 | ||||
Additional paid-in capital—
|
250 | 0 | ||||
|
26,802 | 16,800 | ||||
Less: Treasury stock
|
0 | (500) | ||||
Total liabilities and stockholders’ equity
|
$122,821 | $94,160 |
COOKIE & COFFEE CREATIONS INC. Income Statement Year Ended October 31, 2023 |
||||
---|---|---|---|---|
Sales
|
$485,625 | |||
Cost of goods sold
|
222,694 | |||
Gross profit
|
262,931 | |||
Operating expenses
|
||||
Salaries and wages expense
|
$147,979 | |||
Depreciation expense
|
17,600 | |||
Other operating expenses
|
48,186 | 213,765 | ||
Income from operations
|
49,166 | |||
Other expenses
|
||||
Interest expense
|
$413 | |||
Loss on disposal of plant assets
|
2,500 | 2,913 | ||
Income before income tax
|
46,253 | |||
Income tax expense
|
9,251 | |||
Net income
|
$37,002 |
Additional information:
1. | Equipment (cost $4,500 and book value $3,000) was disposed of at the beginning of the year for $500 cash and replaced with new equipment purchased for $4,000 cash. | |
2. | Additional equipment was bought for $14,000 on November 1, 2022. A $12,000 note payable was signed. The terms provide for equal semi-annual installment payments of $2,000 on May 1 and November 1 of each year, plus interest of 5% on the outstanding principal balance. | |
3. | Other equipment was bought for $13,000 cash. | |
4. | Dividends were declared on the preferred and common stock on October 15, 2023, to be paid on November 15, 2023. | |
5. | Accounts payable relate only to merchandise creditors. | |
6. | Prepaid expenses relate only to other operating expenses. |
Need indirect method
Part 1 is top half of Statement of
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