Using this information, complete the Statement of Cash Flows:- Land was sold for $25,000 in cash- Furniture was purchased for $20,000 in cash- Goodwill was purchased for $66,000 in cash- The compnay sold stock for $227,000 in cash- Company stock was purchased for $20,000 incash- The company paid $4,000 in cash dividendsUnadjusted Trial Balance:Account Title:DebitCreditCash23,400 Inventory60,000 Accounts Receivable22,000 Office Supplies5,000 Prepaid Insurance3,000 Furniture20,000 Land24,000 Goodwill40,000 Accounts Payable 19,900Utilities Payable 600Unearned Revenue 38,000Common Stock 100,000Dividends4,000 Service Revenue 76,900Cost of Goods Sold25,000 Salaries Expense6,000 Rent Expense2,000 Utilities Expense1,000 Total:235,400235,400Adjusting Entries:1. An inventory of supplies showed $3,000 were used up.2. The furniture was purchased for $30,000. It has $0 salvage value and a 5 yearuseful life. One year of depreciation must be recorded.3. $3,000 of insurance was purchased for 12 months. $1,500 of insurance was used.4. Performed $20,000 of services that was paid for in advance5. On last day of the month, performed $9,100 of services for new customer andwill be paid next month6. Happy cleaners provided $9,000 of cleaning services on the last day of themonth. This waas a special yearly clean. They will be paid next month.7. An inventory count revealed there was $4,000 of inventory shrinkage. This was alarger than usual amount of shrinkage.8. The company estimates bad debt expense to be 1% of credit sales. Assume allsales are made on credit.9. A company with net assets of $100,000 was purchased for $190,000 one yearago. The current fair value of the company is 180,000. Perform a goodwillimpairment test and record an impairment entry if one is needed.10. The company had a calculated warranty expense of 19,000 on oustanding sales11. The company sold an additional 10,000 shares at a market price of $15. The parvalue of the stock is $1.12. The company purchased 1,000 of its own shares at a market price of $20. Statement of Cash FlowsCash Flow from Operating Activities:Net Income (Loss)Adjustments to reconcile net income to cash:Provided by Operating ActivitiesDepreciation expenseImpariment lossLoss on disposal of long term assetsGain on disposal of long term assetsIncrease in accounts receivableIncrease in inventoryIncrease in suppliesIncrease in prepaid insuranceIncrease in accounts payableIncrease in utilities payableIncrease in unearned revenueIncrease in Allowance for warranty expenseNet Cash Provided by Opearting ActivitesCash Flow from Investing Activities:Cash receipt for sale of landCash payment for acquisition furnitureCash payment for acquisiton GoodwillNet Cash Provided (Used) by Investing ActivitesCash Flow from Financing Activities:Cash payment from purchase of common stockCash receipt for sale of common stockcash payment of dividendsNet Cash Provided (Used) by Financing ActivitesNet Increase (Decrease) in CashBeginning Cash BalanceEnding Cash Balance—————— ANN SIMPSON DESIGNERIncome StatementYear Ended December 31, 2018Revenues:Sales or Service RevenueExpenses:Cost of goods soldUtilities ExpenseRent ExpenseTOLECleaning expenseONSalary ExpenseSupplies ExpenseakkoomDepreciation Expense- FurnitureDepreciation LADInsurance expenseBad debt expenseImpairment lossWarranty ExpenseTotal ExpensesNet IncomeBeainnina. January 1. 2018Net income for the yearDividendsEnding Balance, December 31, 2018Current Assets:CashInventoryNet Accounts ReceivableOffice SuppliesPrepaid InsuranceTotal Current AssetsProperty. Plant. and Equipment:LandFurnitureLess: Accumulated Depreciation-FurnitureTotal Property. Plant. and EquipmentIntangible Assets:GoodwillTotal AssetsLiabilitiesCurrent Liabilities:Accounts PavableUtilities PavableUnearned RevenueAllowance for Warranty ExpenseTotal Current LiabilitiesTotal LiabilitiesCommon StockAdditional Paid in Capital - Common StockOwner's EquityTreasury StockTotal Stockholders' EquityTotal Liabilities and Stockholders' EquityPageANN SIMPSON DESIGNERStatement of Owner's EauitvYear Ended December 31, 2018ANN SIMPSON DESIGNERBalance SheetDecember 31, 2018AssetsStockholders' Equitv$ 20.000(6.000)29,0001,0002,0009,0006,0003,0006,0001,5001,06010,00019,000$153,400$56,000$30,040$2,000$1,50024,00014,00030,0002$28,900$600$18,000$19,000110,000$140,00014,440($20,000)$106,00087,560$18,440$018,44018,440(4,000)14,440$242,94038,000$310,940$66,50066,500244,440310,940

The cash flow statement assesses a corporation's ability to handle its cash balance, or how…

Using this information, complete the Statement of Cash Flows: - Land was sold for $25,000 in cash - Furniture was purchased for $20,000 in cash - Goodwill was purchased for $66,000 in cash - The compnay sold stock for $227,000 in cash - Company stock was purchased for $20,000 in cash - The company paid $4,000 in cash dividends Unadjusted Trial Balance: Account Title: Debit Credit Cash 23,400 Inventory 60,000 Accounts Receivable 22,000 Office Supplies 5,000 Prepaid Insurance 3,000 Furniture 20,000 Land 24,000 Goodwill 40,000 Accounts Payable 19,900 Utilities Payable 600 Unearned Revenue 38,000 Common Stock 100,000 Dividends 4,000 Service Revenue 76,900 Cost of Goods Sold 25,000 Salaries Expense 6,000 Rent Expense 2,000 Utilities Expense 1,000 Total: 235,400 235,400 Adjusting Entries: 1. An inventory of supplies showed $3,000 were used up. 2. The furniture was purchased for $30,000. It has $0 salvage value and a 5 year useful life. One year of depreciation must be recorded. 3. $3,000 of insurance was purchased for 12 months. $1,500 of insurance was used. 4. Performed $20,000 of services that was paid for in advance 5. On last day of the month, performed $9,100 of services for new customer and will be paid next month

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Using this information, complete the Statement of Cash Flows:

- Land was sold for $25,000 in cash
- Furniture was purchased for $20,000 in cash
- Goodwill was purchased for $66,000 in cash
- The compnay sold stock for $227,000 in cash
- Company stock was purchased for $20,000 in
cash
- The company paid $4,000 in cash dividends

Unadjusted Trial Balance:

Account Title:	Debit	Credit
Cash	23,400
Inventory	60,000
Accounts Receivable	22,000
Office Supplies	5,000
Prepaid Insurance	3,000
Furniture	20,000
Land	24,000
Goodwill	40,000
Accounts Payable		19,900

Utilities Payable		600
Unearned Revenue		38,000
Common Stock		100,000
Dividends	4,000
Service Revenue		76,900
Cost of Goods Sold	25,000
Salaries Expense	6,000
Rent Expense	2,000
Utilities Expense	1,000
Total:	235,400	235,400

Adjusting Entries:

1. An inventory of supplies showed $3,000 were used up.
2. The furniture was purchased for $30,000. It has $0 salvage value and a 5 year
useful life. One year of depreciation must be recorded.
3. $3,000 of insurance was purchased for 12 months. $1,500 of insurance was used.
4. Performed $20,000 of services that was paid for in advance
5. On last day of the month, performed $9,100 of services for new customer and
will be paid next month
6. Happy cleaners provided $9,000 of cleaning services on the last day of the
month. This waas a special yearly clean. They will be paid next month.
7. An inventory count revealed there was $4,000 of inventory shrinkage. This was a
larger than usual amount of shrinkage.
8. The company estimates bad debt expense to be 1% of credit sales. Assume all
sales are made on credit.
9. A company with net assets of $100,000 was purchased for $190,000 one year
ago. The current fair value of the company is 180,000. Perform a goodwill
impairment test and record an impairment entry if one is needed.
10. The company had a calculated warranty expense of 19,000 on oustanding sales
11. The company sold an additional 10,000 shares at a market price of $15. The par
value of the stock is $1.
12. The company purchased 1,000 of its own shares at a market price of $20.

Statement of Cash Flows
Cash Flow from Operating Activities:
Net Income (Loss)
Adjustments to reconcile net income to cash:
Provided by Operating Activities
Depreciation expense
Impariment loss
Loss on disposal of long term assets
Gain on disposal of long term assets
Increase in accounts receivable
Increase in inventory
Increase in supplies
Increase in prepaid insurance
Increase in accounts payable
Increase in utilities payable
Increase in unearned revenue
Increase in Allowance for warranty expense
Net Cash Provided by Opearting Activites
Cash Flow from Investing Activities:
Cash receipt for sale of land
Cash payment for acquisition furniture
Cash payment for acquisiton Goodwill
Net Cash Provided (Used) by Investing Activites
Cash Flow from Financing Activities:
Cash payment from purchase of common stock
Cash receipt for sale of common stock
cash payment of dividends
Net Cash Provided (Used) by Financing Activites
Net Increase (Decrease) in Cash
Beginning Cash Balance
Ending Cash Balance
——————

ANN SIMPSON DESIGNER
Income Statement
Year Ended December 31, 2018
Revenues:
Sales or Service Revenue
Expenses:
Cost of goods sold
Utilities Expense
Rent Expense
TOLE
Cleaning expense
ON
Salary Expense
Supplies Expense
akkoom
Depreciation Expense- Furniture
Depreciation LAD
Insurance expense
Bad debt expense
Impairment loss
Warranty Expense
Total Expenses
Net Income
Beainnina. January 1. 2018
Net income for the year
Dividends
Ending Balance, December 31, 2018
Current Assets:
Cash
Inventory
Net Accounts Receivable
Office Supplies
Prepaid Insurance
Total Current Assets
Property. Plant. and Equipment:
Land
Furniture
Less: Accumulated Depreciation-Furniture
Total Property. Plant. and Equipment
Intangible Assets:
Goodwill
Total Assets
Liabilities
Current Liabilities:
Accounts Pavable
Utilities Pavable
Unearned Revenue
Allowance for Warranty Expense
Total Current Liabilities
Total Liabilities
Common Stock
Additional Paid in Capital - Common Stock
Owner's Equity
Treasury Stock
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity
Page
ANN SIMPSON DESIGNER
Statement of Owner's Eauitv
Year Ended December 31, 2018
ANN SIMPSON DESIGNER
Balance Sheet
December 31, 2018
Assets
Stockholders' Equitv
$ 20.000
(6.000)
29,000
1,000
2,000
9,000
6,000
3,000
6,000
1,500
1,060
10,000
19,000
$153,400
$56,000
$30,040
$2,000
$1,500
24,000
14,000
30,000
2
$28,900
$600
$18,000
$19,000
110,000
$140,000
14,440
($20,000)
$106,000
87,560
$18,440
$0
18,440
18,440
(4,000)
14,440
$242,940
38,000
$310,940
$66,500
66,500
244,440
310,940

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