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The income statement of Guesser Company is shown below.

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The income statement of Guesser Company is shown below.;GUESSER COMPANY;INCOME STATEMENT;FOR THE YEAR ENDED DECEMBER 31, 2007;Sales $755,000;Cost of goods sold 543,000;Gross profit 212,000;Operating expenses;Selling expenses $52,000;Administrative expenses 89,000 141,000;Net income $71,000;Additional information;1. Accounts receivable decreased $63,000 during the year.;2. Inventory increased $38,000 during the year.;3. Prepaid expenses increased $12,000 during the year.;4. Accounts payable to increased $25,000 during the year.;5. Accrued expenses payable increased $6,000 during the year.;6. Administrative expenses include depreciation expense of $20,000.;Instructions;Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2007, for Guesser Company, using the indirect method.;PROBLEM # 2;Condensed financial data of Fulton Corp. for 2008 and 2007 are presented below.;FULTON CORP.;COMPARATIVE BALANCE SHEET;AS OF DECEMBER 31, 2008 AND 2007;2008 2007;Cash $800 $600;Investments 0 200;Receivables 2,250 2,100;Inventory 1,600 1,200;Plant assets 1,600 1,200;Accumulated depreciation (600) (455);$5,650 $4,845;Accounts payable $750 $1,200;Accrued liabilities 330 520;Bonds payable 800 1,000;Capital stock 1,500 1,400;Retained earnings 2,270 725;$5,650 $4,845;FULTON COMPANY;INCOME STATEMENT;FOR THE YEAR ENDED DECEMBER 31, 2008;Sales $15,200;Cost of goods sold 10,400;Gross profit 4,800;Selling and administrative expenses 1,205;Income from operations 3,595;Other revenues and gains;Loss on sale of investments _ 50;Income before income tax 3,545;Income tax expense 1,400;Net income 2,145;Cash dividends 600;Income retained in business $1,545;Additional information;During the year, $100 of common stock was issued in exchange for land. No plant assets were sold in 2008.;Instructions;Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.);PROBLEM # 3;Presented below are data taken from the records of Natural Homes Company.;12/31/2007 12/31/2006;Cash $15,000 $5,000;Current assets other than cash 105,000 129,000;Long-term investments 60,000 50,000;Plant assets 330,000 351,000;$510,000 $535,000;Accumulated depreciation 88,000 102,000;Current liabilities 65000 $73,000;Bonds payable 50000 100,000;Capital stock 173000 153,000;Retained earnings 134000 107,000;$510,000 $535,000;Additional information;1. Held-to-maturity securities carried at a cost of $25,000 on December 31, 2006, were sold in 2007 for;$30,000. The gain (not extraordinary) was incorrectly charged directly to Retained Earnings.;2. Fully depreciated plant assets that cost $57,000 were sold during 2007 for $2,000. The gain (not extraordinary) was incorrectly charged directly to Retained Earnings.;3. Net income as reported on the income statement for the year was $40,000.;4. Dividends paid amounted to $20,000.;5. Depreciation charged for the year was $43,000.;Instructions;Prepare a statement of cash flows for the year 2007 using the indirect method.

 

Paper#26531 | Written in 18-Jul-2015

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