Horngren's Financial & Managerial Accounting, The Managerial Chapters (5th Edition)
5th Edition
ISBN: 9780133851298
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 1, Problem 1.38E
Preparing the statement of
Bean Town Food Equipment Company had the following transactions for the month ending February 29, 2016. Bean Town’s cash balance on February 1, 2016, was $16,400.
| Feb. 1 | Common stock was issued to stockholders for $7,500 cash. |
| 7 | Purchased equipment for $2,500 on account. |
| 14 | Paid $18,000 cash for land. |
| 17 | Paid cash expenses: employees’ salaries, $1,500; office rent, $1,800; utilities, $500. |
| 23 | Paid cash dividends of $3,000. |
| 26 | Earned service revenue for the month, $8,000, receiving cash. |
Prepare the statement of cash flows of Bean Town Food Equipment Company for the month ended February 29, 2016.
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Cash-Basis and Accrual-Basis Accounting
The records of Summers Building Company reveal the following information for 2011.
a. Cash receipts during 2011 (including $50,000 paid by stockholders in exchange for common stock) were $271,000.
b. Cash payments during 2011 (including $7,600 of dividends paid to stockholders) were $164,850.
c. Total selling price of services billed to customers during 2011 was $201,600.
d. Salaries earned by employees during 2011 were $113,430.
e. Cost of supplies used during 2011 in operation of the business was $47,255.
Required:
1. Calculate Summers Building Company's net income for 2011 on an accrual basis.
$
2. Calculate Summers Building Company's net income for 2011 on a cash-basis.
$
3. Explain how the cash-basis of accounting allows for the manipulation of income.
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
Accountants for Johnson, Inc. have assembled the following data for the year ended December 31, 2018:
2018 2017
Current Assets
Cash $124,700 $26,000
Accounts Receivable 64,500 69,400
Merchandise Inventory 82,000 79,000
Current Liabilities
Accounts Payable 57,700 55,500
Income Tax Payable 14,300 17,100
Transaction Data for 2018:
Issuance of common stock for cash $43,000 Payment of notes payable $44,100
Depreciation expense 26,000 Payment of cash dividends 51,000
Purchase of equipment with cash 69,000 Issuance of notes payable to borrow cash 66,000
Acquisition of land by issuing long-term notes payable 115,000 Gain on sale of building 6,500
Book value of building sold 56,000 Net income 70,500
Prepare Johnson's statement of cash flows using the indirect method. Include an accompanying schedule of non-cash investing and financing activities.
Consider the following financial data for Nguyen Industries:
Statement of Financial Position as of December 31, 2018
Cash
$
232,500
Accounts payable
$
86,500
Accts. receivable
357,500
Short-term bank note
254,000
Inventories
150,500
Accrued wages & taxes
80,000
Total current assets
$
740,500
Total current liabilities
$
420,500
Long-term debt
566,000
Net fixed assets
774,500
Common equity
528,500
Total assets
$
1,515,000
Total liab. & equity
$
1,515,000
Profit & Loss Statement for 2018
Industry Average Ratios
Net sales
$
1,894,000
Current ratio
1.4×
Cost of goods sold
1,382,500
Quick ratio
1.0×
Gross profit
$
511,500
Days sales outstanding
63 days
Operating expenses
373,000
Inventory turnover
9.5×
EBIT
$
138,500
Total asset turnover
1.5×
Interest expense
64,000
Net…
Chapter 1 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (5th Edition)
Ch. 1 - Prob. 1QCCh. 1 - Prob. 2QCCh. 1 - Prob. 3QCCh. 1 - Prob. 4QCCh. 1 - Prob. 5QCCh. 1 - Which of the following requires accounting...Ch. 1 - At the end of a recent year, Global Cleaning...Ch. 1 - Consider the overall effects on Global Cleaning...Ch. 1 - Assume that Global Cleaning Service performed...Ch. 1 - The balance sheet reports the a. financial...
Ch. 1 - Assume Global Cleaning Service had net income of...Ch. 1 - What is accounting?Ch. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQCh. 1 - Prob. 5RQCh. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 8RQCh. 1 - Prob. 9RQCh. 1 - Which concept states that accounting information...Ch. 1 - Financial statements in the United States are...Ch. 1 - Prob. 12RQCh. 1 - Prob. 13RQCh. 1 - Prob. 14RQCh. 1 - Prob. 15RQCh. 1 - Prob. 16RQCh. 1 - List the four financial statements. Briefly...Ch. 1 - What is the calculation for return on assets...Ch. 1 - Identifying users of accounting information For...Ch. 1 - Prob. 1.2SECh. 1 - Prob. 1.3SECh. 1 - Prob. 1.4SECh. 1 - Applying accounting assumptions and principles...Ch. 1 - Using the accounting equation Kenmore Handyman...Ch. 1 - Using the accounting equation Joshs Overhead Doors...Ch. 1 - Identifying accounts Consider the following...Ch. 1 - Using the accounting equation to analyze...Ch. 1 - Using the accounting equation to analyze...Ch. 1 - Identifying accounts on the financial statements...Ch. 1 - Prob. 1.12SECh. 1 - Use the following injo17nation to answer Short...Ch. 1 - Prob. 1.14SECh. 1 - Prob. 1.15SECh. 1 - Calculating Return on Assets (ROA) Refined Water...Ch. 1 - Prob. 1.17ECh. 1 - Prob. 1.18ECh. 1 - Prob. 1.19ECh. 1 - Using the accounting equation Compute the missing...Ch. 1 - Using the accounting equation Green City Builders...Ch. 1 - Prob. 1.22ECh. 1 - Using the accounting equation During 2016,...Ch. 1 - Using the accounting equation The records of...Ch. 1 - Using the accounting equation to analyze...Ch. 1 - Using the accounting equation to analyze business...Ch. 1 - Using the accounting equation to analyze business...Ch. 1 - Prob. 1.28ECh. 1 - Using the accounting equation to analyze business...Ch. 1 - Preparing the financial statements Estella Osage...Ch. 1 - Use the following information to answer Exercises...Ch. 1 - Use the following information to answer Exercises...Ch. 1 - Use the following information to answer Exercises...Ch. 1 - Use the following information to answer Exercises...Ch. 1 - Use the following information to answer Exercises...Ch. 1 - Use the following information to answer Exercises...Ch. 1 - Preparing the statement of cash flows For each...Ch. 1 - Preparing the statement of cash flows Bean Town...Ch. 1 - Calculating return on assets (ROA) Alec Appliance...Ch. 1 - Using the accounting equation for transaction...Ch. 1 - Using the accounting equation for transaction...Ch. 1 - Preparing financial statements Presented here are...Ch. 1 - Preparing financial statements Click a Pix...Ch. 1 - Preparing financial statements The bookkeeper of...Ch. 1 - Prob. 1.45APCh. 1 - Using the accounting equation for transaction...Ch. 1 - Prob. 1.47BPCh. 1 - Using the accounting equation for transaction...Ch. 1 - Prob. 1.49BPCh. 1 - Prob. 1.50BPCh. 1 - Preparing financial statements The bookkeeper of...Ch. 1 - Using the accounting equation for transaction...Ch. 1 - Using the accounting equation for transaction...Ch. 1 - Using the accounting equation for transaction...Ch. 1 - Lets examine a case using Gregs Tunes and Sals...Ch. 1 - The tobacco companies have paid billions because...Ch. 1 - Prob. 1.1CTFCCh. 1 - This and similar cases in later chapters focus on...
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