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Simple Things Industries Ltd. Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Increase/(Decrease) Assets Cash 175,000 15,000 Accounts Receivable 230,000 220,000 Inventories 310,000 340,000 10,000 ? Prepaid expenses Intangible assets Equipment, net Total Assets 30,000 105,000 105,000 860,000 830,000 ? 1,710,000 1,520,000 Liabilities Accounts payable 90,000 140,000 Accrued liabilities 190,000 160,000 Income tax payable 120,000 140,000 Long-term notes payable Stockholders' Equity Common Stock Retained earnings Treasury stock Total liabilities and stockholders' equity 1,710,000 360,000 450,000 250,000 ? 400,000 ? (20,000)? 400,000 640,000 (90,000) 1,520,000 Simple Things Industries Ltd Income Statement Year Ended December 31,2014 Revenues and gains: 1,900,000 20,000 Sales revenue Gain on sale of equipment Total revenues and gains Expenses Cost of goods sold Depreciation expense Other operating expense Total expenses Income before income taxes 1,920,000 850,000 190,000 360,000 1,400,000 520,000 180,000 340,000 Income tax expense Net Income Notes Acquisition of plant asset during 2014 Sale proceed from sale of equipment Receipt for issuance of notes payable Payment for note payable Dividend paid Book value of equipment sold 320,000 120,000 10,000 100,000 100,000 100,000

Simple Things Industries Ltd. Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Increase/(Decrease) Assets Cash 175,000 15,000 Accounts Receivable 230,000 220,000 Inventories 310,000 340,000 10,000 ? Prepaid expenses Intangible assets Equipment, net Total Assets 30,000 105,000 105,000 860,000 830,000 ? 1,710,000 1,520,000 Liabilities Accounts payable 90,000 140,000 Accrued liabilities 190,000 160,000 Income tax payable 120,000 140,000 Long-term notes payable Stockholders' Equity Common Stock Retained earnings Treasury stock Total liabilities and stockholders' equity 1,710,000 360,000 450,000 250,000 ? 400,000 ? (20,000)? 400,000 640,000 (90,000) 1,520,000 Simple Things Industries Ltd Income Statement Year Ended December 31,2014 Revenues and gains: 1,900,000 20,000 Sales revenue Gain on sale of equipment Total revenues and gains Expenses Cost of goods sold Depreciation expense Other operating expense Total expenses Income before income taxes 1,920,000 850,000 190,000 360,000 1,400,000 520,000 180,000 340,000 Income tax expense Net Income Notes Acquisition of plant asset during 2014 Sale proceed from sale of equipment Receipt for issuance of notes payable Payment for note payable Dividend paid Book value of equipment sold 320,000 120,000 10,000 100,000 100,000 100,000

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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I need help with Question 3 and 1
Please to show the working out. Thanks.
 
 

1. Reconstruct the company’s comparative balance sheet for 2013/2014 show the missing figures to include the appropriate sign as a positive or negative figure.

 

2. Which category of the statement of cash flow is considered as the most important? Why?

 

3. Prepare a complete statement of cash flows for 2014 using the indirect method using the information in line with your surname initial.

 

 

Simple Things Industries Ltd. Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Increase/(Decrease) Assets Cash 175,000 15,000 ? Accounts Receivable 230,000 220,000 Inventories 310,000 340,000 ? Prepaid expenses Intangible assets 30,000 10,000 105,000 105,000 Equipment, net Total Assets 860,000 830,000 1,710,000 1,520,000 Liabilities Accounts payable 90,000 140,000 Accrued liabilities 190,000 160,000 140,000 ? 450,000 ? Income tax payable Long-term notes payable tockholders' Equity Common Stock Retained earnings Treasury stock Total liabilities and stockholders' equity 1,710,000 120,000 360,000 250,000 ? 400,000 ? (20,000)? 400,000 640,000 (90,000) 1,520,000 Simple Things Industries Ltd Income Statement Year Ended December 31,2014 Revenues and gains: 1,900,000 20,000 Sales revenue Gain on sale of equipment Total revenues and gains 1,920,000 Expenses Cost of goods sold 850,000 Depreciation expense Other operating expense Total expenses 190,000 360,000 1,400,000 520,000 180,000 340,000 Income before income taxes Income tax expense Net Income Notes Acquisition of plant asset during 2014 Sale proceed from sale of equipment Receipt for issuance of notes payable 320,000 120,000 10,000 Payment for note payable Dividend paid Book value of equipment sold 100,000 100,000 100,000
Transcribed Image Text:Simple Things Industries Ltd. Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Increase/(Decrease) Assets Cash 175,000 15,000 ? Accounts Receivable 230,000 220,000 Inventories 310,000 340,000 ? Prepaid expenses Intangible assets 30,000 10,000 105,000 105,000 Equipment, net Total Assets 860,000 830,000 1,710,000 1,520,000 Liabilities Accounts payable 90,000 140,000 Accrued liabilities 190,000 160,000 140,000 ? 450,000 ? Income tax payable Long-term notes payable tockholders' Equity Common Stock Retained earnings Treasury stock Total liabilities and stockholders' equity 1,710,000 120,000 360,000 250,000 ? 400,000 ? (20,000)? 400,000 640,000 (90,000) 1,520,000 Simple Things Industries Ltd Income Statement Year Ended December 31,2014 Revenues and gains: 1,900,000 20,000 Sales revenue Gain on sale of equipment Total revenues and gains 1,920,000 Expenses Cost of goods sold 850,000 Depreciation expense Other operating expense Total expenses 190,000 360,000 1,400,000 520,000 180,000 340,000 Income before income taxes Income tax expense Net Income Notes Acquisition of plant asset during 2014 Sale proceed from sale of equipment Receipt for issuance of notes payable 320,000 120,000 10,000 Payment for note payable Dividend paid Book value of equipment sold 100,000 100,000 100,000
Expert Solution
Step 1

Gain on sale of Equipment=Sale proceeds-Book value of the plant=120,000-100,000=20,000

Step 2

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