Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Question
Chapter 11, Problem 62.3C
To determine
Concept introduction:
Cash flow statement also known as statement of
Whether it is worthwhile to prepare prospective statement of cash flow for an ongoing business.
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Nicole Mackisey is thinking of forming her own spa business, Nicole's Getaway Spa (NGS). Nicole expects that she and two family members will each contribute $10,000 to the business and receive
1,000 shares each. Nicole forecasts the following amounts for the first year of operations, ending December 31, 2021: Cash on hand and in the bank, $2,250; amounts due from customers from spa
treatments, $1,790; building and equipment, $71,000; amounts owed to beauty supply outlets for spa equipment, $4,670; notes payable to a local bank for $38,970. Cash dividends of $3,000 will be
paid to the stockholders during the year. Nicole also forecasts that first-year sales revenues will be $43,600; wages will be $24,500; the cost of supplies used up will be $7,500; office expenses will be
$5,500; and income taxes will be $1,700.
Required:
Based on Nicole's estimates, prepare a (forecasted) CREATE A INCOME STATEMENT, RETAINED EARNINGS AND BALANCE SHEET for Nicole's Getaway Spa for the year ended…
(ix)
A long-term bond purchased by Varsity Supplies & Things two (2) years ago, with a face
value of $450,000 will mature on January 15, 2023. To meet the financial obligations of the
business, management has decided to liquidate the investment upon maturity. On that date
semi-annual interest computed at a rate of 8%% per annum is also expected to be collected
(x)
As part of its investing activities, the management of Varsity Supplies & Things has just
concluded an expansion project relating to the business's storage facilities. The project
required capital outlay of $1,600,000 and was funded by a loan from a family member, who
is a silent partner in the business. $320,000 of the principal along with interest of $35,000
will become due and payable on January 25, 2023.
Wages and salaries are expected to be $3,384,000 per annum and will be paid monthly.
(xi)
(xii)
The cash balance on March 31, 2023, is expected to be an overdraft of $248,000
(b)
▪ A cash budget, with a total column, for…
Nicole Mackisey is thinking of forming her own spa business, Nicole's Getaway Spa (NGS). Nicole expects that she and
two family members will each contribute $10,000 to the business and receive 1,000 shares each. Nicole forecasts the
following amounts for the first year of operations, ending December 31, 2021: Cash on hand and in the bank, $2,850;
amounts due from customers from spa treatments, $1,850; building and equipment, $77,000; amounts owed to beauty
supply outlets for spa equipment, $4,730; notes payable to a local bank for $39,570. Cash dividends of $2,000 will be
paid to the stockholders during the year. Nicole also forecasts that first-year sales revenues will be $58,200; wages will be
$27,500; the cost of supplies used up will be $10,500; office expenses will be $8,500; and income taxes will be $2,300.
CC1-1 (Algo) Part 1
Required:
1. Based on Nicole's estimates, prepare a (forecasted) income statement for Nicole's Getaway Spa for the year ended December 31,
2021.
NICOLE'S…
Chapter 11 Solutions
Cornerstones of Financial Accounting
Ch. 11 - Prob. 1DQCh. 11 - Prob. 2DQCh. 11 - How is a statement of cash flows different from an...Ch. 11 - Prob. 4DQCh. 11 - What are the three categories into which inflows...Ch. 11 - Prob. 6DQCh. 11 - Why are direct exchanges of long-term debt for...Ch. 11 - Describe the relationship between changes in cash...Ch. 11 - What are two ways to report a companys net cash...Ch. 11 - Why are depreciation, depletion, and amortization...
Ch. 11 - Prob. 11DQCh. 11 - Prob. 12DQCh. 11 - What does an increase in inventory imply? How...Ch. 11 - Prob. 14DQCh. 11 - Prob. 15DQCh. 11 - Prob. 16DQCh. 11 - Prob. 17DQCh. 11 - What balance sheet account changes might you...Ch. 11 - Prob. 19DQCh. 11 - Prob. 20DQCh. 11 - Prob. 21DQCh. 11 - Prob. 22DQCh. 11 - Prob. 23DQCh. 11 - Prob. 24DQCh. 11 - Which of the following is not a use of the...Ch. 11 - Which of the following would be classified as a...Ch. 11 - Prob. 3MCQCh. 11 - Which of the following is an example of a cash...Ch. 11 - Prob. 5MCQCh. 11 - Which of the following statements is true? a. Net...Ch. 11 - Mullinix Inc. reported the following information:...Ch. 11 - Which item is added to net income when computing...Ch. 11 - Refer to the information for Cornett Company...Ch. 11 - Prob. 10MCQCh. 11 - Chasse Building Supply Inc. reported net cash...Ch. 11 - Smoltz Company reported the following information...Ch. 11 - Prob. 13MCQCh. 11 - Classification of Cash Flows Stanfield Inc....Ch. 11 - Classification of Cash Flows Patel Company...Ch. 11 - Prob. 16CECh. 11 - Analyzing Changes in Balance Sheet Accounts Refer...Ch. 11 - Prob. 18CECh. 11 - Prob. 19CECh. 11 - Determining Net Cash Flow from Investing...Ch. 11 - Prob. 21CECh. 11 - Prob. 22CECh. 11 - Cash Receipts from Customers Singleton Inc. had...Ch. 11 - Prob. 24CECh. 11 - Prob. 25CECh. 11 - Prob. 26BECh. 11 - Prob. 27BECh. 11 - Analyzing Balance Sheet Accounts A review of the...Ch. 11 - Prob. 29BECh. 11 - Prob. 30BECh. 11 - Prob. 31BECh. 11 - Prob. 32BECh. 11 - Prob. 33BECh. 11 - Classification of Cash Flows A review of the...Ch. 11 - Classification of Cash Flows The following are...Ch. 11 - Analyzing Changes in Balance Sheet Accounts A...Ch. 11 - Analyzing the Accounts Casey Company uses a...Ch. 11 - Analyzing the Accounts The controller for Summit...Ch. 11 - Reporting Net Cash Flow from Operating Activities...Ch. 11 - Prob. 40ECh. 11 - Determining Cash Flows from Investing Activities...Ch. 11 - Determining Cash Flows 1from Investing Activities...Ch. 11 - Determining Cash Flows from Financing Activities...Ch. 11 - Prob. 44ECh. 11 - Partial Statement of Cash Flows Service Company...Ch. 11 - Prob. 46ECh. 11 - Prob. 47ECh. 11 - Preparing Net Cash Flows from Operating...Ch. 11 - Preparing a Statement of Cash Flows-Direct Method...Ch. 11 - Preparing a Statement of Cash Flows-Direct Method...Ch. 11 - Prob. 51ECh. 11 - Prob. 52PSACh. 11 - Prob. 53PSACh. 11 - Classification of Cash Flows Rolling Meadows...Ch. 11 - Prob. 55PSACh. 11 - Preparing a Statement of Cash Flows Monon Cable...Ch. 11 - Prob. 57PSACh. 11 - Preparing Net Cash Flows from Operating...Ch. 11 - Using a Spreadsheet to Prepare a Statement of Cash...Ch. 11 - Prob. 52PSBCh. 11 - Prob. 53PSBCh. 11 - Prob. 54PSBCh. 11 - Preparing a Statement of Cash Flows Volusia...Ch. 11 - Prob. 56PSBCh. 11 - Prob. 57PSBCh. 11 - Prob. 58PSBCh. 11 - Using a Spreadsheet to Prepare a Statement of Cash...Ch. 11 - Prob. 60.1CCh. 11 - Prob. 60.2CCh. 11 - Prob. 60.3CCh. 11 - Prob. 61.1CCh. 11 - Profitability Declines and the Statement of Cash...Ch. 11 - Prob. 61.3CCh. 11 - Prob. 61.4CCh. 11 - Prob. 62.1CCh. 11 - Prob. 62.2CCh. 11 - Prob. 62.3CCh. 11 - Income, Cash Flow, and Future Losses On January L...Ch. 11 - Income, Cash Flow, and Future Losses On January L...Ch. 11 - Income, Cash Flow, and Future Losses On January L...Ch. 11 - Prob. 63.4CCh. 11 - Researching Accounting Standards: Dissenting Views...Ch. 11 - Prob. 64.2CCh. 11 - Prob. 65.1CCh. 11 - Prob. 65.2CCh. 11 - Prob. 65.3CCh. 11 - Prob. 65.4CCh. 11 - Prob. 65.5CCh. 11 - Prob. 65.6CCh. 11 - Prob. 65.7CCh. 11 - Prob. 65.8CCh. 11 - Prob. 66.1CCh. 11 - Prob. 66.2CCh. 11 - Prob. 66.3CCh. 11 - Prob. 66.4CCh. 11 - Comparative Analysis: Under Armour, Inc., versus...Ch. 11 - Prob. 67.1CCh. 11 - CONTINUING PROBLEM: FRONT ROW ENTERTAINMENT The...
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