Fundamentals of Financial Accounting
5th Edition
ISBN: 9780078025914
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
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Question
Chapter 12, Problem 12.7E
1.
To determine
To compute and indicate: The change in each
2.
To determine
To prepare: The statement of cash flows of Company G for the year ended December 31, using indirect method.
3.
To determine
To explain: in one sentence whyincrease in
4.
To determine
To explain: in one sentence whya decrease in inventory is added.
5.
To determine
To explain: in one sentence whyan increase in salaries and wages payable is added.
6.
To determine
To explain: whether the cash flows typical for a start-up, healthy, or troubled company.
Expert Solution & Answer
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Please answer both a and b thx
Salus Mea Inc., is developing its annual financial statements at December 31, current year. The
statements are complete except for the statement of cash flows. The completed comparative
balance sheets and income statement are summarized as follows:
Balance sheet at December 31
Cash
Accounts receivable
Merchandise inventory
Property and equipment
Less: Accumulated depreciation
Accounts payable
Wages payable
Note payable, long-term
Common stock and additional paid-in capital
Retained earnings
Income statement for current year
Sales
Cost of goods sold
Depreciation expense
Other expenses
Net income
Additional Data:
1. Bought equipment for cash, $48,900.
2. Paid $14,700 on the long-term note payable.
Current Year
$ 73,250
15,250
23,450
209,250
(57.450)
$263,750
$ 16,500
2,000
56,300
103,950
$5,000
$263.750
$205,000
(123,500)
(11,700)
(4),000)
$26.800
3. Issued new shares of stock for $38,050 cash.
4. Dividends of S650 were declared and paid.
5. Other expenses all relate to wages.
6.…
PART A
The following are extracts from the financial records of ABC Ltd for the year ended
31 August 2021.
АBC Ltd
Extract from the Statement of financial statement as at 31 Auqust 2021
31 August 2021 31 August 2020
- R
- R
Bank
50 000
20 000
Inventories - trade goods
22 000
30 000
Trade recelvables
77 00
69 D00
Trade payables
44 000
46 000
Prepaid expenses:
1 800
1 200
Accrued expenses: Interest
1 000
2 400
Accrued expenses; other
5 700
4 400
SARS - Income tax payable
8 000
3 000
Dividends payable
1 500
2 700
ABC Ltd
Extract from the Statement of profit or loss and other comprehensive Income
for the year ended 31 Auqust 2021
Sales
592 000
Cost of sales
(301 000)
Gross profit
291 000
Profit on sale of Equipment
9 000
Depreciation
41 000
Interest expense
2 600
Income tax expense
15 200
Profit for the year
110 300
Additional Information:
1. The dividends declared for the current year is R2 400.
Chapter 12 Solutions
Fundamentals of Financial Accounting
Ch. 12 - Compare the purposes of the income statement, the...Ch. 12 - Prob. 2QCh. 12 - Prob. 3QCh. 12 - What are the major categories of business...Ch. 12 - Prob. 5QCh. 12 - Describe the types of items used to compute cash...Ch. 12 - Under the indirect method, depreciation expense is...Ch. 12 - Prob. 8QCh. 12 - Explain why a 50,000 increase in inventory during...Ch. 12 - Prob. 10Q
Ch. 12 - As a junior analyst, you are evaluating the...Ch. 12 - Prob. 12QCh. 12 - Prob. 13QCh. 12 - Prob. 14QCh. 12 - (Supplement 12A) How is the sale of equipment...Ch. 12 - Prob. 1MCCh. 12 - Prob. 2MCCh. 12 - Prob. 3MCCh. 12 - Prob. 4MCCh. 12 - Which of the following would not appear in the...Ch. 12 - Prob. 6MCCh. 12 - Prob. 7MCCh. 12 - Prob. 8MCCh. 12 - The total change in cash as shown near the bottom...Ch. 12 - Prob. 10MCCh. 12 - Prob. 12.1MECh. 12 - Matching Items Reported to Cash Flow Statement...Ch. 12 - Determining the Effects of Account Changes on Cash...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 12.5MECh. 12 - Computing Cash Flows from Investing Activities...Ch. 12 - Computing Cash Flows from Financing Activities...Ch. 12 - Computing Cash Flows Under IFRS Using the data...Ch. 12 - Prob. 12.9MECh. 12 - Interpreting Cash Flows from Operating, Investing,...Ch. 12 - Matching Items Reported to Cash Flow Statement...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 12.13MECh. 12 - Matching items Reported to Cash Flow Statement...Ch. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Prob. 12.6ECh. 12 - Prob. 12.7ECh. 12 - Prob. 12.8ECh. 12 - Reporting and Interpreting Cash Flows from...Ch. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Inferring Balance Sheet Changes from the Cash Flow...Ch. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Prob. 12.15ECh. 12 - Prob. 12.16ECh. 12 - Prob. 12.17ECh. 12 - Prob. 12.18ECh. 12 - Prob. 12.19ECh. 12 - Prob. 12.20ECh. 12 - Prob. 12.21ECh. 12 - Prob. 12.22ECh. 12 - (Supplement 12B) Preparing a Statement of Cash...Ch. 12 - Determining Cash Flow Statement Effects of...Ch. 12 - Prob. 12.2CPCh. 12 - Preparing a Statement of Cash Flows (Indirect...Ch. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Prob. 12.5CPCh. 12 - Prob. 12.6CPCh. 12 - (Supplement 12A) Preparing and Interpreting a...Ch. 12 - Prob. 12.1PACh. 12 - Prob. 12.2PACh. 12 - Prob. 12.3PACh. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 12.6PACh. 12 - (Supplement 12A) Preparing and Interpreting a...Ch. 12 - Prob. 12.1PBCh. 12 - Prob. 12.2PBCh. 12 - Prob. 12.3PBCh. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Prob. 12.5PBCh. 12 - Prob. 12.6PBCh. 12 - Prob. 12.1SDCCh. 12 - Prob. 12.2SDCCh. 12 - Prob. 12.6SDCCh. 12 - Prob. 12.7SDCCh. 12 - Prob. 12.8SDCCh. 12 - Prob. 12.9SDCCh. 12 - Prob. 12.1CC
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