ABC RETAIL INC.

You are given the following 12/31/2013 and excerpts from the 3/31/2014 Balance Sheet for  ABC Retailing along with a record of ABC’s cash receipts and disbursements for the first calendar quarter of 2014.

 ABC RETAIL INC. 12/31/2013 BALANCE SHEET

Assets 12/31/13 Liabilities and OE 12/31/13 

Cash 24 Accounts Payable 18 

Accts Receivable 21 Salaries and Wages Payable 4 

Inventory 67 Deferred Revenue 15 

Note Receivable 20 Dividends Payable 5 

Prepaid Rent Expense 30 Bank Loans and Accrued Interest 150 

Land 25 

Buildings & Equipment 460 

Less: Common Stock 100 

Accum Dep (195) 

Trademarks – net book value 40 Retained Earnings 200 

Total Assets 492 Total Liabs and OE 492

ABC RETAIL INC. 3/31/2014 BALANCE SHEET

Assets 3/31/14 Liabilities and OE 3/31/14 

Cash ? Accounts Payable 25 

Accts Receivable 35 Salaries and Wages Payable 6 

Inventory 90 Deferred Revenue 10 

Note Receivable 16 Dividends Payable 8 

Prepaid Rent Expense 38 Bank Loans and Accrued Interest 155 

Land 25 

Buildings & Equipment ? 

Less: Common Stock 100 

Accum Dep (210) 

Trademarks – net book value 39 Retained Earnings ? 

Total Assets ? Total Liabs and OE ? 

Cash Receipts and Disbursements for the period 1/1/2014 – 3/31/2014

Receipts 

Collections from customers . . . . . . . . . . . . 550 

From sale of Buildings and Equipment . . . . 60 

Payments received on Note Receivable . . . . 5 

Disbursements 

Purchases of Inventory . . . . . . . . . . . . . . . . . 300 

Purchases of Buildings and Equipment . . . . . 75

Payments of Rent . . . . . . . . . . . . . . . . . . . . . 100 

Payments to salaries and wages . . .. . . . . . . . 55 

Payments of dividends . . . . . . . . . . . . . . . . . . 5 

Payments of Taxes . . . . . . . . . . . . . . . . . . . . . 25 

Payments of Interest . . . . . . . . . . . . . . . . . . . . 4

PART I 

In this part you will be asked to reconstruct some of the transactions that took place during Q1 

2014. You will also use this information in the subsequent parts of this exam. 

1) XYZ recognized Depreciation Expense of $25 during Q1 2014. Give the journal entry for the recognition of Depreciation Expense during Q1 of 2014.

 2) XYZ recognized a Gain on Sale of Building and Equipment of $15 during Q1 2014. Give the journal entry for the sale of Building and Equipment during Q1 of 2014. 

3) How much inventory was purchased by XYZ during Q1 2014? (HINT: All Accounts Payable are for Inventory.) 

4) Given your answer to the previous question, what was Cost of Goods Sold Expense for XYZ during Q1 2014?

5) What was Sales Revenue during Q1 2014? 

6) What was Rent Expense during Q1 2014?

7) What was Interest Expense during Q1 2014?

8) All cash receipts for Notes Receivable during Q1 2014 are principal payments. What was Interest Revenue on Notes Receivable during Q1 2014? 

9) What was Salary and Wage Expense during Q1 2014? 

PART II 

Construct the following Financial Statements for ABC:

 (1) Q1 2014 Income Statement

 (2) Q1 2014 Statement of Cash Flows (Direct and Indirect Methods), and

(3) 3/31/2014 Balance Sheet.

You will use all of the information provided in the previous parts of this exam 

You must submit your financial statements and any supporting work as a PDF file. I will not work my way through spread sheet calculations in order to try and follow what you have done. Statements must be in standard format. You may provide supporting information for partial credit in the form of t-accts, journal entries and explanations.