Trevor Company's balance sheet for December 31, 20XO is as follows: Cash 100 Accounts Receivable 200 Interest Receivable 25 Inventory Notes Receivable (long term) Equipment, at cost Accumulated depreciation, Equipment Equipment, net Total assets 150 500 400 150 250 $1,225 Accounts payable Wages payable 140 20 Unearned sales revenue 40 Paid-in-capital Retained income 600 425 Total liabilities and $1,225 stockholder's equity The following summarized transactions occurred during 20X1: a. Purchased merchandise inventory on credit, $700. b. Delivered merchandise to customers who had paid in advance as of December 31, 20X0. c. Sales of merchandise (all on credit and excluding transaction b) during 20X1 were $3,000. d. The cost of merchandise sold (including that in transaction b) during 20X1 was $900. с. e. Collection from credit customers was $2,500. f. Interest on notes receivable of 12% per annum was collected each August 1. g. Cash payment to suppliers, $800 (see item: a) h. Cash payment for wages during 20X1 was $250. i. New equipment was purchased on December 10 for $300 in cash. Cash dividend of $50 was declared on December 20, 20X1. The payment date of dividends was January 10, 20X2. j.
Trevor Company's balance sheet for December 31, 20XO is as follows: Cash 100 Accounts Receivable 200 Interest Receivable 25 Inventory Notes Receivable (long term) Equipment, at cost Accumulated depreciation, Equipment Equipment, net Total assets 150 500 400 150 250 $1,225 Accounts payable Wages payable 140 20 Unearned sales revenue 40 Paid-in-capital Retained income 600 425 Total liabilities and $1,225 stockholder's equity The following summarized transactions occurred during 20X1: a. Purchased merchandise inventory on credit, $700. b. Delivered merchandise to customers who had paid in advance as of December 31, 20X0. c. Sales of merchandise (all on credit and excluding transaction b) during 20X1 were $3,000. d. The cost of merchandise sold (including that in transaction b) during 20X1 was $900. с. e. Collection from credit customers was $2,500. f. Interest on notes receivable of 12% per annum was collected each August 1. g. Cash payment to suppliers, $800 (see item: a) h. Cash payment for wages during 20X1 was $250. i. New equipment was purchased on December 10 for $300 in cash. Cash dividend of $50 was declared on December 20, 20X1. The payment date of dividends was January 10, 20X2. j.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Trevor Company's balance sheet for December 31, 20XO is as follows:
Cash
100
Accounts Receivable
200
Interest Receivable
25
Inventory
Notes Receivable (long term)
Equipment, at cost
Accumulated depreciation,
Equipment
Equipment, net
Total assets
150
500
400
150
250
$1,225
Accounts payable
Wages payable
140
20
Unearned sales revenue
40
Paid-in-capital
600
Retained income
425
Total liabilities and
$1,225
stockholder's equity
The following summarized transactions occurred during 20X1:
Purchased merchandise inventory on credit, $700.
b. Delivered merchandise to customers who had paid in advance as of December 31, 20X0.
а.
с.
Sales of merchandise (all on credit and excluding transaction b) during 20X1 were $3,000.
d. The cost of merchandise sold (including that in transaction b) during 20X1 was $900.
е.
Collection from credit customers was $2,500.
f.
Interest on notes receivable of 12% per annum was collected each August 1.
g. Cash payment to suppliers, $800 (see item: a)
h. Cash payment for wages during 20X1 was $250.
New equipment was purchased on December 10 for $300 in cash.
i.
j.
Cash dividend of $50 was declared on December 20, 20X1. The payment date of dividends was
January 10, 20X2.
The following adjustments were made on December 31, 20X1:
k. Accrual of interest receivable (to be computed, see item f).
1. Depreciation for 20X1, $100
Transcribed Image Text:Required
1. Analyze the above transactions. Use the balance sheet equation format (spread sheet).
2. Prepare income statement for the year 20X1. Assume that the company does not have to pay
taxes.
3. Also prepare the statement of cash flows for 20X1. Use the direct method, i.e. list separately the
cash inflow/outflow entries for operations, investing, and financing activities.
(Note: Each entry carries partial points. If your totals do not balance because of a wrong entry for a
transaction, you will be penalized for only that entry and not the whole problem. If you think that
entry is correct, do not change it just to make the final total to balance.)
your
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