Concept explainers
Videos
Preparing the statement of
Frontier Rare Coins (FRC) was formed on January 1, 2016. Additional data for the year follow:
a. On January 1, 2016, FRC issued no par common stock for $500,000.
b. Early in January, FRC made the following cash payments:
1. For store fixtures, $51,000
2. For merchandise inventory, $300,000
3. For rent expense on the store building, $16,000
c. Later in the year, FRC purchased merchandise inventory on account for $239,000. Before year-end, FRC paid $139,000 of this accounts payable.
d. During 2016, FRC sold 2,900 units of merchandise inventory for $350 each. Before year-end, the company collected 90% of this amount. Cost of goods sold for the year was $270,000, and ending merchandise inventory totaled $269,000.
e. The store employs three people. The combined annual payroll is $84,000, of which FRC still owes $2,000 at year-end.
f. At the end of the year, FRC paid income tax of $20,000. There are no income taxes payable.
g. Lace in 2016, FRC paid cash dividends of $39,000.
h. For store fixtures, FRC uses the
Requirements
1. Prepare FRC's income statement for the year ended December 31, 2016. Use the single-step format, with all revenues listed together and all expenses listed together.
2. Prepare FRC's
3. Prepare FRC's statement of cash flows for the year ended December 31, 20 16. Format cash flows from operating activities by the direct method.
Want to see the full answer?
Check out a sample textbook solution
Chapter 14 Solutions
Horngren's Financial & Managerial Accounting, Student Value Edition (5th Edition)
- Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost Per Unit Direct materials Direct labor $ 5.50 $3.00 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 4.00 Fixed selling expense $2.50 Fixed administrative expense $2.00 Sales commissions $ Variable administrative expense $0.50 For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?arrow_forwardGross profit? & General Accountarrow_forwardFinancial accounting questionarrow_forward
- Total assets turnoverarrow_forwardWhat is its return on equity?arrow_forwardDuring a specific period, Nexus Technologies reported a decrease in total assets of $14,500 and an increase in stockholders' equity of $9,800. By what amount and direction must total liabilities have changed during that same period?arrow_forward
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning