Problems21-73Statement of Income and Retained EarningsFor the Year Ended December 31, 2016Net sales$1,950,000Operating expenses:Cost of salesSelling and administrative expensesDepreciation$1,150,000505,00053,000$1,708,000$242,000Operating incomeOther (income) expense:Interest expenseEquity in net income of Hall Inc.Loss on sale of equipmentAmortization of patent2415,000(13,000)5,0004,000$ 11,000$ 231,000Income before income taxesIncome taxes:CurrentDeferredProvision for income taxes%2479,00011,000$ 90,000$ 141,000334,000$ 475,00043,000$ 432,000Net incomeRetained earnings, January 1, 2016Cash dividends, paid August 13, 2016Retained earnings, December 31, 2016Additional information:On January 2, 2016, Farrell sold equipment costing $45,000, with a book value of $24,000, for S19,000 cash.b. On April 2, 2016, Farrell issued 1,000 shares of common stock for $23,000 cash.On May 14, 2016, Farrell sold all of its treasury stock for $25,000 cash.d. On June 1, 2016, Farrell paid $50,000 to retire bonds with a face value (and book value) of $50,000.On July 2, 2016, Farrell purchased equipment for $63,000 cash.f.a.c.е.On December 31, 2016, land with a fair market value of $150,000 was purchased through the issuance of along-term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December31, 2018.g. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methodsfor income tax reporting and the straight-line method for financial statement reporting.Required:1. Prepare a spreadsheet to support a statement of cash flows for Farrell for the year ended December 31, 2016,based on the preceding information.2. Prepare the statement of cash flows. P21-13 Comprehensive The following are Farrell Corporation's balance sheets as of December 31, 2016, and 2015, andthe statement of income and retained earnings for the year ended December 31, 2016:LO 21.3LO 21.4LO 21.5Balance SheetsDecember 31Increase(Decrease)20162015AssetsCashAccounts receivable, netInventoriesInvestment in Hall Inc. at equityLandPlant and equipmentLess: Accumulated depreciationPatentTotal Assets$225,000295,000549,00073,000350,000624,000(139,000)16,000$1,993,000$ 180,000305,000431,00060,000200,000606,000(107,000)20,000$1,695,000$ 45,000(10,000)118,00013,000150,00018,000(32,000)(4,000)$298,000Liabilities and Shareholders' EquityAccounts payable and accrued expensesNote payable, long-termBonds payableDeferred taxes payableCommon stock, $10 parAdditional paid-in capitalRetained earningsTreasury stock, at costTotal Liabilities and Shareholders' Equity$ 563,000$ 604,000150,000160,00041,000410,000196,000432,000210,00030,000400,000175,000334,000(17,000)$1,695,000$ 41,000150,000(50,000)11,00010,00021,00098,00017,000$298,000$1,993,000

The question is based on the concept of Cash flow statement.

Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales $1,950,000 Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,150,000 505,000 53,000 $1,708,000 $242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $15,000 (13,000) 5,000 4,000 $ 11,000 $231,000 Income before income taxes Income taxes: Current Deferred $ 79,000 11,000 90.000 Provision for income taxes

Statement of Income and Retained Earnings For the Year Ended December 31, 2016 Net sales $1,950,000 Operating expenses: Cost of sales Selling and administrative expenses Depreciation $1,150,000 505,000 53,000 $1,708,000 $242,000 Operating income Other (income) expense: Interest expense Equity in net income of Hall Inc. Loss on sale of equipment Amortization of patent $15,000 (13,000) 5,000 4,000 $ 11,000 $231,000 Income before income taxes Income taxes: Current Deferred $ 79,000 11,000 90.000 Provision for income taxes

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.4.13P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...

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