homework questions

Question 1

[1] Consolidated Balance Sheet

                           EOY 1       EOY 2

Cash                     1438.21      1009.30

Accounts Receivable       190.51      386.57

Inventory                 226.80      460.20

PPE, gross                413.00      848.00

Accumulated Depreciation  103.25      315.25

TOTAL ASSETS             2165.27      2388.82

Accounts Payable          340.20      690.30

Interest Payable           44.03      70.45

Note Payable              629.00      377.40

TOTAL LIABILITIES        1013.23      1138.15

Common Stock             1014.00      1014.00

Retained Earnings         138.04      236.67

TOTAL EQUITY             1152.04      1250.67

TL + TE                  2165.27      2388.82

[1] Consolidated Income Statement

                        Yr2

Sales                980.28

COGS                 544.60

Depreciation Expense 212.00

Interest Expense      26.42

NET INCOME           197.26

Additional information:

• Dividends during year 2 were: 98.63
• No sales or disposals of long-lived assets during year 2

1. Cash (used) provided by operating activities: Answer[removed]
2. Cash (used) provided by investing activities: Answer[removed]
3. Cash (used) provided by financing activities: Answer[removed]
4. Net increase (decrease) in cash: Answer[removed]

Question 2

• Following from partial year-end adjusted trial balance:
• Sales revenue: CR 185533
• Loss on sale of investments: DR 2757
• Interest revenue: CR 11955
• Loss from flood damage (unusual and infrequent): DR 7149
• Cost of goods sold: DR 76069
• Selling, general and administrative expenses: DR 38962
• Restructuring costs: DR 9155
• Loss from operations on segment held for sale: DR 12136
• Income tax expense has not yet been accrued
• The income tax rate: 38%
• The segment being sold qualifies as a component of the entity
• The number of shares of common stock outstanding during the year: 146888

1. Income (loss) from continuing operations before income taxes: Answer[removed]
2. Income tax expense on income (loss) from continuing operations: Answer[removed]
3. Net income (loss) from continuing operations: Answer[removed]
4. Net income (loss) from discontinued operations: Answer[removed]
5. Net income (loss) from extraordinary items: Answer[removed]
6. Net income (loss): Answer[removed]
7. Earnings (loss) per share from continuing operations (round to at least 3 decimal places): Answer[removed]
8. Earnings (loss) per share from discontinuing operations (round to at least 3 decimal places): Answer[removed]
9. Earnings (loss) per share from extraordinary items (round to at least 3 decimal places): Answer[removed]
10. Earnings (loss) per share (round to at least 3 decimal places): Answer[removed]

Question 3

P purchased a machine on January 1, 2011 for $43625. At the time of purchase, the machine was expected to have a useful life of 21 years and a residual value of $1745. P uses straight-line depreciation. At the beginning of 2017, P estimated the machine had a remaining useful life of 18 years with no residual value.

1. Depreciation expense for the year ending December 31, 2011: Answer[removed]
2. Carrying value of the machine on January 1, 2017: Answer[removed]
3. Depreciation expense for the year ending December 31, 2017: Answer[removed]
4. Carrying value of the machine on December 31, 2017: Answer[removed]
5. Carrying value of the machine on December 31, 2035: Answer[removed]

Question 4

P had pretax income from continuing operations of $16208 during 2014. During 2014 P disposed of a division that qualified as a component of an entity at a pretax gain (loss) of $948. The division had an operating gain (loss) of $-205 prior to the sale in 2014. Assume a tax rate of 15%.

1. Net income (loss) from continuing operations: Answer[removed]
2. Net income (loss) from discontinued operations: Answer[removed]
3. Net income (loss): Answer[removed]

Question 5

For the year ended December 31, 2014. Assume a tax rate of 32%.

• Sales revenue: $10374
• Cost of goods sold: $7662
• Administrative expenses: $659
• Interest expense: $560
• Loss from earthquake damage (unusual and infrequent event): $1356
• Restructuring costs: $632
• Understatement of depreciation expense in 2013 caused by mathematical error: $1087

1. Net income (loss) from continuing operations: Answer[removed]
2. Net income (loss) from discontinued operations: Answer[removed]
3. Net income (loss) from extraordinary items: Answer[removed]
4. Net income (loss): Answer[removed]