Zambrano Wholesale Corporation maintains its records on a cash basis. At the end of each year the company's accountant obtains the necessary information to prepare accrual basis financial statements. The following cash flow occurred during the year ended December 31, 2024: Cash receipts: From customers Interest on note Loan from a local bank Total cash receipts Cash disbursements: Purchase of inventory Annual insurance payment Payment of salaries Dividends paid to shareholders Annual rent payment Total cash disbursements Selected balance sheet information: Cash Accounts receivable Inventory Prepaid insurance Prepaid rent Interest receivable Note receivable Equipment Accumulated depreciation Accounts payable (for inventory) Salaries payable Notes payable Interest payable $ 695,000 4,860 120,000 $ 819,860 $ 394,000 6,480 214,000 11,000 26,000 $ 651,480 12/31/2023 12/31/2024 $ 27,000 $ 195,380 64,000 96,000 84,000 64,000 2,900 11,400 3,645 54,000 120,000 (42,000) 112,000 20,400 0 0 ? ? ? 54,000 120,000 (54,000) 126,000 24,800 120,000 ? Additional information: 1. On March 31, 2023, Zambrano lent a customer $54,000. Interest at 9% is payable annually on each March 31. Principal is due in 2027. 2. The annual insurance payment is paid in advance on April 30. The policy period begins on May 1. 3. On October 31, 2024, Zambrano borrowed $120,000 from a local bank and signed a note promising repayment. Principal and interest at 6% are due on October 31, 2025. 4. Annual rent on the company's facilities is paid in advance on June 30. The rental period begins on July 1. Required: 1. Prepare an accrual basis income statement for 2024 (ignore income taxes). 2. Determine the following balance sheet amounts on December 31, 2024:
Zambrano Wholesale Corporation maintains its records on a cash basis. At the end of each year the company's accountant obtains the necessary information to prepare accrual basis financial statements. The following cash flow occurred during the year ended December 31, 2024: Cash receipts: From customers Interest on note Loan from a local bank Total cash receipts Cash disbursements: Purchase of inventory Annual insurance payment Payment of salaries Dividends paid to shareholders Annual rent payment Total cash disbursements Selected balance sheet information: Cash Accounts receivable Inventory Prepaid insurance Prepaid rent Interest receivable Note receivable Equipment Accumulated depreciation Accounts payable (for inventory) Salaries payable Notes payable Interest payable $ 695,000 4,860 120,000 $ 819,860 $ 394,000 6,480 214,000 11,000 26,000 $ 651,480 12/31/2023 12/31/2024 $ 27,000 $ 195,380 64,000 96,000 84,000 64,000 2,900 11,400 3,645 54,000 120,000 (42,000) 112,000 20,400 0 0 ? ? ? 54,000 120,000 (54,000) 126,000 24,800 120,000 ? Additional information: 1. On March 31, 2023, Zambrano lent a customer $54,000. Interest at 9% is payable annually on each March 31. Principal is due in 2027. 2. The annual insurance payment is paid in advance on April 30. The policy period begins on May 1. 3. On October 31, 2024, Zambrano borrowed $120,000 from a local bank and signed a note promising repayment. Principal and interest at 6% are due on October 31, 2025. 4. Annual rent on the company's facilities is paid in advance on June 30. The rental period begins on July 1. Required: 1. Prepare an accrual basis income statement for 2024 (ignore income taxes). 2. Determine the following balance sheet amounts on December 31, 2024:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Zambrano Wholesale Corporation maintains its records on a cash basis. At the end of each year the company's
accountant obtains the necessary information to prepare accrual basis financial statements. The following cash flows
occurred during the year ended December 31, 2024:
Cash receipts:
From customers
Interest on note
Loan from a local bank
Total cash receipts.
Cash disbursements:
Purchase of inventory
Annual insurance payment
Payment of salaries
Dividends paid to
shareholders
Annual rent payment
Total cash disbursements
Selected balance sheet information:
Cash
Accounts receivable
Inventory
Prepaid insurance
Prepaid rent
Interest receivable
Note receivable
Equipment
Accumulated depreciation
Accounts payable (for
inventory)
Salaries payable
$
695,000
4,860
120,000
$
819,860
$
394,000
6,480
214,000
11,000
26,000
$
651,480
12/31/2023 12/31/2024
$ 27,000 $ 195,380
64,000
96,000
84,000
64,000
2,900
11,400
3,645
54,000
120,000
(42,000)
112,000
20,400
?
?
?
0
0
54,000
120,000
(54,000)
126,000
24,800
120,000
?
Notes payable
Interest payable
Additional information:
1. On March 31, 2023, Zambrano lent a customer $54,000. Interest at 9% is payable annually on each March 31.
Principal is due in 2027.
2. The annual insurance payment is paid in advance on April 30. The policy period begins on May 1.
3. On October 31, 2024, Zambrano borrowed $120,000 from a local bank and signed a note promising repayment.
Principal and interest at 6% are due on October 31, 2025.
4. Annual rent on the company's facilities is paid in advance on June 30. The rental period begins on July 1.
Required:
1. Prepare an accrual basis income statement for 2024 (ignore income taxes).
2. Determine the following balance sheet amounts on December 31, 2024:
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