ACCOUNTING Problem Los Lobos Case Study 87101

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1.    

Los Lobos Ledger Preparation

 

 

·        

Review the following information:

 

 

              

 

 

12-31-2007

12-31-2006

 

Cash

 $         35,000

 $         32,000

 

Accounts receivable

33,000

            30,000

 

Allowance for doubtful accounts

(1,300)

            (1,100)

 

Inventory 

31,000

            47,000

 

Property, plant, & equipment 

100,000

            95,000

 

Accumulated depreciation 

 (16,500)

           (15,000)

 

Trade accounts payable 

 (25,000)

           (15,500)

 

Income taxes payable 

 (21,000)

           (29,100)

 

Deferred income taxes 

 (5,300)

             (4,600)

 

8% callable bonds payable 

(45,000)

           (20,000)

 

Unamortized bond discount 

              4,500

              5,000

 

Common stock 

           (50,000)

           (40,000)

 

Additional paid-in capital 

             (9,100)

             (7,500)

 

Retained earnings 

           (25,200)

           (64,600)

 

Sales 

         (558,300)

         (778,700)

 

Cost of goods sold 

          250,000

          380,000

 

Selling expenses 

          141,500

          172,000

 

General and administrative expenses 

          137,000

          151,300

 

Interest expense

              4,300

              2,600

 

Income tax expense 

            20,400

            61,200

 

 

 $                 -

 $                 -

 

Additional information:

 

 

1.    

Los Lobos purchased $5,000 in equipment during 2007.

 

2.    

Los Lobos allocated one-third of its depreciation expense to selling expenses and the remainder to general and administrative expenses.

 

3.    

Bad debt expense for 2007 was $5,000, and write-offs of uncollectible accounts totaled $4,800.

 

4.    

$12,000 of the debt is current portion.

     

 

Cash Sales

$72,600

Collections on Receivables

477,900

Purchases

(219,500)

Purchase of Equipment

(5,000)

Wages

(150,700)

Payments to Suppliers

(126,300)

Tax Payments

(27,800)

Borrowing

30,000

Repayment of Debt

(5,000)

Interest Payments

(3,800)

Sale of Stock

11,600

Dividends

(51,000)

 

 

·        

Prepare a statement of cash flows using the direct and indirect methods.

 

·        

Prepare a classified balance sheet.

 

 

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    • 8 years ago