The following balance sheet for the Los Gatos Corporation was
prepared by a recently hired accountant....
The following balance sheet for the Los Gatos Corporation was
prepared by a recently hired accountant. In reviewing the statement
you notice several errors.
LOS GATOS CORPORATION
Balance Sheet
At December 31, 2018
Assets
Cash
$
64,000
Accounts receivable
116,000
Inventories
67,000
Machinery (net)
132,000
Franchise (net)
42,000
Total assets
$
421,000
Liabilities and Shareholders’ Equity
Accounts payable
$
74,000
Allowance for uncollectible accounts
17,000
Note payable
79,000
Bonds payable
122,000
Shareholders’ equity
129,000
Total liabilities and shareholders’ equity
$...
Problem 2 – Preparing Financial Statements
The accountant for Farley Corporation prepared the
following list from...
Problem 2 – Preparing Financial Statements
The accountant for Farley Corporation prepared the
following list from the company's accounting records for the year
ended December 31, 20XX:
Service revenue
$18,500
Cash
$ 3,000
Accounts receivable
2,500
A
Farley, Drawing
5,000
Equipment
4,200
L
Supplies expense
1,800
Accounts payable
1,200
L
Rent expenses
3,400
Wages expense
5,000
L
Farley, Capital 1/1/20XX
8,000
Office supplies
800
A
Insurance expense
2,000
Required: Using the attached pages at the end of this
document:
1....
The following incorrect income statement was prepared
by the accountant of the Axel Corporation:
AXEL CORPORATION...
The following incorrect income statement was prepared
by the accountant of the Axel Corporation:
AXEL CORPORATION
Income Statement
For the Year Ended December 31, 2021
Revenues and gains:
Sales revenue
$
700,000
Interest revenue
43,000
Gain on sale of investments
90,000
Total revenues and gains
833,000
Expenses and losses:
Cost of goods sold
$
380,000
Selling expense
70,000
Administrative expense
90,000
Interest expense
27,000
Restructuring costs
66,000
Income tax expense
50,000
Total expenses and losses
683,000
Net Income
$
150,000...
1. The data given below are from the accounting records of the
Kuhn Corporation:
Net Income...
1. The data given below are from the accounting records of the
Kuhn Corporation:
Net Income (accrual basis)
$
45,000
Depreciation Expense
$
9,000
Decrease in Accounts Payable
$
2,500
Decrease in Inventory
$
3,000
Increase in Bonds Payable
$
10,000
Sale of Common Stock for cash
$
30,000
Increase in Accounts Receivable
$
4,500
Based on this information, the net cash provided by (used in)
operating activities using the indirect method would be:
Multiple Choice
$55,000
$58,000
$50,000
$60,000...
Given the following Financial Information Answer the following
question:
2017
2018
Cash
7,000
218,462
Accounts Receivable...
Given the following Financial Information Answer the following
question:
2017
2018
Cash
7,000
218,462
Accounts Receivable
8,000
8,800
Inventory
4,000
4,400
Prepaid Assets
3,000
3,300
Other Assets
1,000
1,100
Total Current Assets
23,000
236,062
Net PPE
80,000
14,000
Intangibles
4,000
4,000
Total Assets
107,000
254,062
Accounts Payable
8,000
8,800
Salary Payable
1,000
1,100
Notes Payable
3,000
3,000
Total Current Liabilities
12,000
12,900
Long-Term Debt
50,000
50,000
Total Liabilities
62,000
62,900
Common Stock
70,000
70,000
Retained Earnings
-25,000
121,162
total equity...
Net Cash Flow from Operating Activities (Indirect Method)
Lincoln Company owns no plant assets and reported...
Net Cash Flow from Operating Activities (Indirect Method)
Lincoln Company owns no plant assets and reported the following
income statement for the current year.
Sales
$ 810,000
Cost of goods sold
$ 470,000
Wages expense
110,000
Rent expense
42,000
Insurance expense
15,000
637,000
Net income
$ 173,000
Additional balance sheet information about the company follows.
End of Year
Beginning of Year
Accounts receivable
$ 54,000
$ 49,000
Inventory
60,000
65,000
Prepaid insurance
10,000
7,000
Accounts payable
22,000
17,000
Wages payable...
Below is Salem Company’s income statement for 2019 that was
prepared by an inexperienced accountant. Salem...
Below is Salem Company’s income statement for 2019 that was
prepared by an inexperienced accountant. Salem Company Income
Statement As of December 31, 2019 Revenues: Sales revenue
……………..…………………………………… $298,000 Wages payable…………..………………………………………..
4,000 Gain on sale of investment…………………………………….. 5,250 Deferred
revenue………………………………………………. 2,500 Interest
payable………………………………………………… 1,000 Accumulated
depreciation……………………………………… 8,000 Total revenues
………………………………………………….. $318,750 Less operating expenses: Selling
expenses….……………………… …………………. $32,250 Research and development
expense………………….…….. 4,750 Prepaid advertising …….………………………………….
3,000 Indirect manufacturing labor cost..………………………… 16,200
Utilities expense..…. .....................………………………… 10,200 Direct
manufacturing labor cost....
The following incorrect income statement was prepared
by the accountant of the Axel Corporation:
AXEL CORPORATION...
The following incorrect income statement was prepared
by the accountant of the Axel Corporation:
AXEL CORPORATION
Income Statement
For the Year Ended December 31, 2021
Revenues and gains:
Sales revenue
$
592,000
Interest revenue
32,000
Gain on sale of investments
86,000
Total revenues and gains
710,000
Expenses and losses:
Cost of goods sold
$
325,000
Selling expense
67,000
Administrative expense
87,000
Interest expense
16,000
Restructuring costs
55,000
Income tax expense
40,000
Total expenses and losses
590,000
Net Income
$
120,000...
Below is Salem Company’s income statement for 2019 that was
prepared by an inexperienced accountant. Salem...
Below is Salem Company’s income statement for 2019 that was
prepared by an inexperienced accountant. Salem Company Income
Statement As of December 31, 2019 Revenues: Sales revenue
……………..…………………………………… $298,000 Wages payable…………..………………………………………..
4,000 Gain on sale of investment…………………………………….. 5,250 Deferred
revenue………………………………………………. 2,500 Interest
payable………………………………………………… 1,000 Accumulated
depreciation……………………………………… 8,000 Total revenues
………………………………………………….. $318,750 Less operating expenses: Selling
expenses….……………………… …………………. $32,250 Research and development
expense………………….…….. 4,750 Prepaid advertising …….………………………………….
3,000 Indirect manufacturing labor cost..………………………… 16,200
Utilities expense..…. .....................………………………… 10,200 Direct
manufacturing labor cost....
Post Closing Entries
ABC
Corporation
Adjusted Trial
Balance
December 31,
2016
Debit
Credit
Cash
$
834,544...
Post Closing Entries
ABC
Corporation
Adjusted Trial
Balance
December 31,
2016
Debit
Credit
Cash
$
834,544
Accounts Receivable
442,120
Allowance for doubtful accounts
75,000
Inventory
70,000
Allowance to Reduce Inventory to NRV
16,000
Prepaid Insurance
4,500
Land
88,000
Building
37,500
Accumulated depreciation: building
1,265
Equipment
21,600
Accumulated depreciation: equipment
9,900
Patent
45,000
Accounts Payable
88,851
Interest Payable
35,000
Income taxes payable
37,221
Wages payable
4,000...