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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 pavable (for inventory) $ 680,000 4,080 105,000 $ 789,080 $ 391,000 6,120 211,000 11,000 24,500 $643,620 12/31/2023 $ 25,500 62,500 81,000 2,600 11,100 3,060 51,000 105,000 (40,500) 110.500 12/31/2024 $ 170,960 93,000 62,500 7 51,000 105,000 (51,000) 123.000

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 pavable (for inventory) $ 680,000 4,080 105,000 $ 789,080 $ 391,000 6,120 211,000 11,000 24,500 $643,620 12/31/2023 $ 25,500 62,500 81,000 2,600 11,100 3,060 51,000 105,000 (40,500) 110.500 12/31/2024 $ 170,960 93,000 62,500 7 51,000 105,000 (51,000) 123.000

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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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 pavable (for inventory) $ 680,000 4,080 105,000 $ 789,080 $391,000 6,120 211,000 11,000 24,500 $ 643,620 12/31/2023 $ 25,500 62,500 81,000 2,600 11,100 3,060 51,000 105,000 (40,500) 110.500 12/31/2024 $ 170,960 93,000 62,500 51,000 105,000 (51,000) 123.000
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 pavable (for inventory) $ 680,000 4,080 105,000 $ 789,080 $391,000 6,120 211,000 11,000 24,500 $ 643,620 12/31/2023 $ 25,500 62,500 81,000 2,600 11,100 3,060 51,000 105,000 (40,500) 110.500 12/31/2024 $ 170,960 93,000 62,500 51,000 105,000 (51,000) 123.000
Cash Accounts receivable. Inventory Prepaid insurance Prepaid rent Interest receivable t Note receivable 12/31/2023 $ 25,500 62,500 81,000 2,600 11,100 3,060 51,000 105,000 (40,500) 110,500 20,100 12/31/2024 $ 170,960 93,000 62,500 0 0 ? ? 2 Equipment Accumulated depreciation Accounts payable (for inventory) Salaries payable Notes payable Interest payable Additional information: 1. On March 31, 2023, Zambrano lent a customer $51,000. Interest at 8% 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 $105,000 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: 51,000 105,000 (51,000) 123,000 24,200 105,000 ?
Transcribed Image Text:Cash Accounts receivable. Inventory Prepaid insurance Prepaid rent Interest receivable t Note receivable 12/31/2023 $ 25,500 62,500 81,000 2,600 11,100 3,060 51,000 105,000 (40,500) 110,500 20,100 12/31/2024 $ 170,960 93,000 62,500 0 0 ? ? 2 Equipment Accumulated depreciation Accounts payable (for inventory) Salaries payable Notes payable Interest payable Additional information: 1. On March 31, 2023, Zambrano lent a customer $51,000. Interest at 8% 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 $105,000 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: 51,000 105,000 (51,000) 123,000 24,200 105,000 ?
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