ACC 421 Week 4 Wiley Plus Assignment - Exercises

ACC 421 Week 4 Wiley Plus Assignment - Exercises

Problem 1

The income statement of Rodriquez Company is shown below.

RODRIQUEZ COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012
Sales		$6,894,600
Cost of goods sold
Beginning inventory	$1,893,870
Purchases	4,375,530
Goods available for sale	6,269,400
Ending inventory	1,608,650
Cost of goods sold		4,660,750
Gross profit		2,233,850
Operating expenses
Selling expenses	440,640
Administrative expenses	703,840	1,144,480
Net income		$1,089,370

Additional information:

1.		Accounts receivable decreased $312,690 during the year.
2.		Prepaid expenses increased $178,550 during the year.
3.		Accounts payable to suppliers of merchandise decreased $281,970 during the year.
4.		Accrued expenses payable decreased $124,510 during the year.
5.		Administrative expenses include depreciation expense of $55,760.

Prepare the operating activities section of the statement of cash flows using the direct method.

Problem 2

Presented below are two independent situations.

Situation A:
Chenowith Co. reports revenues of $200,680 and operating expenses of $110,380 in its first year of operations, 2012. Accounts receivable and accounts payable at year-end were $79,260 and $40,870, respectively. Assume that the accounts payable related to operating expenses. Ignore income taxes.

Using the direct method, compute net cash provided (used) by operating activities. (If an amount reduces the account balance then enter with negative sign.)

Net cash by operating activities		$[removed]

Situation B:
The income statement for Edgebrook Company shows cost of goods sold $307,650 and operating expenses (exclusive of depreciation) $231,760. The comparative balance sheet for the year shows that inventory increased $21,380, prepaid expenses decreased $7,680, accounts payable (related to merchandise) decreased $15,450, and accrued expenses payable increased $13,950.

Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.

(a)		Cash payments to suppliers		$[removed]
(b)		Cash payments for operating expenses		$[removed]

Problem 3

Condensed financial data of Fairchild Company for 2012 and 2011 are presented below.

FAIRCHILD COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2012 AND 2011
	2012		2011
Cash	$1,801		$1,091
Receivables	1,757		1,301
Inventory	1,594		1,900
Plant assets	1,897		1,707
Accumulated depreciation	(1,205	)	(1,170	)
Long-term investments (held-to-maturity)	1,299		1,462
	$7,143		$6,291

Accounts payable	$1,207		$796
Accrued liabilities	203		245
Bonds payable	1,418		1,631
Common stock	1,893		1,706
Retained earnings	2,422		1,913
	$7,143		$6,291

FAIRCHILD COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012
Sales		$6,851
Cost of goods sold		4,691
Gross margin		2,160
Selling and administrative expenses		930
Income from operations		1,230
Other revenues and gains
Gain on sale of investments		82
Income before tax		1,312
Income tax expense		531
Net income		$781

Additional information:

During the year, $78 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $272.

Prepare a statement of cash flows using the indirect method. (If an amount reduces the account balance then enter with negative sign.)

Problem 4

Condensed financial data of Fairchild Company for 2012 and 2011 are presented below.

FAIRCHILD COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2012 AND 2011
	2012		2011
Cash	$1,803		$1,095
Receivables	1,755		1,291
Inventory	1,581		1,910
Plant assets	1,893		1,708
Accumulated depreciation	(1,194	)	(1,163	)
Long-term investments (held-to-maturity)	1,299		1,475
	$7,137		$6,316

Accounts payable	$1,205		$789
Accrued liabilities	213		235
Bonds payable	1,411		1,649
Common stock	1,898		1,692
Retained earnings	2,410		1,951
	$7,137		$6,316

FAIRCHILD COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012
Sales		$6,828
Cost of goods sold		4,694
Gross margin		2,134
Selling and administrative expenses		935
Income from operations		1,199
Other revenues and gains
Gain on sale of investments		80
Income before tax		1,279
Income tax expense		547
Net income		$732

Additional information:

During the year, $78 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $273.

Prepare a statement of cash flows using the direct method. (If an amount reduces the account balance then enter with negative sign.)

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