Fundamentals Of Financial Accounting
6th Edition
ISBN: 9781259864230
Author: PHILLIPS, Fred, Libby, Robert, Patricia A.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 1, Problem 1CP
Preparing an Income Statement. Statement of
Assume that you are the president of Nuclear Company. At the end of the first year of operations (December 31), the following financial data for the company are available:
| Accounts Payable | $30,000 |
| 59,500 | |
| Cash | 12,000 |
| Common Stock | 62,280 |
| Dividends | 200 |
| Equipment | 36,000 |
| Notes Payable | 1,470 |
| Operating Expenses | 57,200 |
| Other Expenses | 8,850 |
| Sales Revenue | 88,000 |
| Supplies | 8,000 |
Required:
- 1. Prepare an income statement for the year ended December 31.
TIP: Begin by classifying each account as asset, liability, stockholders’ equity, revenue, or expense. Each account is reported on only one financial statement.
- 2. Prepare a statement of retained earnings for the year ended December 31.
TIP: Because this is the first year of operations, the beginning balance in Retained Earnings will be zero.
- 3. Prepare a balance sheet at December 31.
TIP: The balance sheet includes the ending balance from the statement of retained earnings.
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Assume you are the president of High Power Corporation. At the end of the first year of operations (December 31), the
following financial data for the company are available:
Accounts Payable
Accounts Receivable
Cash
Common Stock
Dividends
Equipment
Notes Payable
Operating Expenses
Other Expenses
Sales Revenue
Supplies
HIGH POWER CORPORATION
Income Statement
$ 33,400
11,500
14,600
60,390
2,080
0
92,000
1,970
59,700
Required:
1. Prepare an income statement for the year ended December 31.
7,980
98,400
6,300
The following are selected account balances of Rule Corporation at the end of the current year:
Debit
Credit
Operating Expenses
$3,200
Sales Revenue
$17,780
Cost of Goods Sold
8,500
Interest Expense
790
Gain on Sale of Land
590
Rule is subject to a 30% income tax rate, and shareholders own 1,200 shares of its capital stock.
Required:
Prepare the income statement for Rule.
RULE CORPORATION
Income Statement
For the Year Ended December 31, Current Year
Other items:
Earnings per share
Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $49,900; total assets, $249,400; common stock, $89,000; and retained earnings, $31,607.)
CABOT CORPORATION
Balance Sheet
December 31 of current year
Assets Liabilities and Equity
Cash $ 10,000 Accounts payable $ 16,500
Short-term investments 9,400 Accrued wages payable 3,600
Accounts receivable, net 30,000 Income taxes payable 3,400
Merchandise inventory 40,150 Long-term note payable, secured by mortgage on plant assets 70,400
Prepaid expenses 2,500 Common stock 89,000
Plant assets, net 153,300 Retained earnings 62,450
Total assets $ 245,350 Total liabilities and equity $ 245,350
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
Sales $ 452,600
Cost of goods sold 298,050
Gross profit 154,550
Operating expenses 98,800
Interest expense 4,100
Income before taxes 51,650
Income tax…
Chapter 1 Solutions
Fundamentals Of Financial Accounting
Ch. 1 - Define accounting.Ch. 1 - Prob. 2QCh. 1 - Briefly distinguish financial accounting from...Ch. 1 - The accounting process generates financial reports...Ch. 1 - Explain what the separate entity assumption means...Ch. 1 - List the three main types of business activities...Ch. 1 - What information should be included in the heading...Ch. 1 - What are the purposes of (a) the balance sheet,...Ch. 1 - Explain why the income statement, statement of...Ch. 1 - Briefly explain the difference between net income...
Ch. 1 - Describe the basic accounting equation that...Ch. 1 - Describe the equation that provides the structure...Ch. 1 - Describe the equation that provides the structure...Ch. 1 - Prob. 14QCh. 1 - Prob. 15QCh. 1 - Prob. 16QCh. 1 - Briefly define what an ethical dilemma is and...Ch. 1 - Prob. 18QCh. 1 - Prob. 1MCCh. 1 - Which of the following is true regarding the...Ch. 1 - Which of the following is false regarding the...Ch. 1 - Which of the following regarding retained earnings...Ch. 1 - Prob. 5MCCh. 1 - Which of the following statements regarding the...Ch. 1 - Prob. 7MCCh. 1 - Which of the following is true? a. FASB creates...Ch. 1 - Which of the following would not be a goal of...Ch. 1 - Prob. 10MCCh. 1 - Prob. 1MECh. 1 - Matching Definitions with Terms or Abbreviations...Ch. 1 - Matching Definitions with Terms Match each...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to the Basic...Ch. 1 - Matching Financial Statement Items to the Four...Ch. 1 - Reporting Amounts on the Statement of Cash Flows...Ch. 1 - Prob. 11MECh. 1 - Preparing a Statement of Retained Earnings Stone...Ch. 1 - Relationships among Financial Statements Items...Ch. 1 - Prob. 14MECh. 1 - Relationships among Financial Statements Items...Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Preparing a Balance Sheet DSW, Inc., is a designer...Ch. 1 - Completing a Balance Sheet and Inferring Net...Ch. 1 - Labeling and Classifying Business Transactions The...Ch. 1 - Preparing an Income Statement and Inferring...Ch. 1 - Preparing an Income Statement Home Realty,...Ch. 1 - Prob. 8ECh. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Analyzing and Interpreting an Income Statement...Ch. 1 - Prob. 11ECh. 1 - Matching Cash Flow Statement Items to Business...Ch. 1 - Preparing an Income Statement. Statement of...Ch. 1 - Interpreting the Financial Statements Refer to...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Evaluating Financial Statements Refer to CP1-3....Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Prob. 2PACh. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Evaluating Financial Statements Refer to PA1-3....Ch. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Interpreting the Financial Statements Refer to PB...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Evaluating Financial Statements Refer to PB1-3....Ch. 1 - Finding Financial Information Answer the following...Ch. 1 - Comparing Financial Information Refer to the...Ch. 1 - Prob. 5SDCCh. 1 - Prob. 6SDCCh. 1 - Prob. 1CC
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