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ashford acc206 week 1 assignment

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Question;ACC;206 Week Assignment;Please complete the following 5 exercises;below in either Excel or a word document (but must be single document). You;must show your work where appropriate (leaving the calculations within Excel;cells is acceptable). Save the document, and submit it in the appropriate week;using the Assignment Submission button.;1.;Critical Thinking Question;Answer the following questions;Why are noncash transactions, such as the exchange of common stock for a;building for example, included on a statement of cash flows? How are these;noncash transactions disclosed?;2.;Classification of activitiesClassify each of the;following transactions as arising from an operating (O), investing (I);financing (F), or noncash investing/financing (N) activity.;a.;Received $80,000 from the sale of land.;b.;Received $3,200 from cash sales.;c.;Paid a $5,000 dividend.;d.;Purchased $8,800 of merchandise for cash.;e.;Received $100,000 from the issuance of common stock.;f.;Paid $1,200 of interest on a note payable.;g.;Acquired a new laser printer by paying $650.;h.;Acquired a $400,000 building by signing a $400,000 mortgage note.;3.;Overview of direct and indirect methods;Evaluate the comments that follow as being True or False. If the;comment is false, briefly explain why.;a.;Both the;direct and indirect methods will produce the same cash flow from operating;activities.;b.;Depreciation;expense is added back to net income when the indirect method is used.;c.;One of the;advantages of using the direct method rather than the indirect method is that;larger cash flows from financing activities will be reported.;d.;The cash;paid to suppliers is normally disclosed on the statement of cash flows when the;indirect method of statement preparation is employed.;e.;The dollar;change in the Merchandise Inventory account appears on the statement of cash;flows only when the direct method of statement preparation is used.;4.;Equipment transaction and cash flow reporting;Dec. 31, 20X4;Dec. 31, 20X3;Property, Plant & Equipment;Land;$94,000;$94,000;Equipment;652,000;527,000;Less: Accumulated depreciation;-316,000;-341,000;New equipment;purchased during 20x4 totaled $280,000. The 20x4 income statement disclosed;equipment depreciation expense of $41,000 and a $9,000 loss on the sale of;equipment.;a.;Determine;the cost and accumulated depreciation of the equipment sold during 20X4.;b.;Determine;the selling price of the equipment sold.;c.;Show how;the sale of equipment would appear on a statement of cash flows prepared by;using the indirect method.;5.;Cash flow information: Direct and indirect methods;The comparative;year-end balance sheets of Sign Graphics, Inc., revealed the following activity;in the company's current accounts;20X5;20X4;Increase / Decrease);Current assets;Cash;$55,400;$35,200;$20,200;Accounts receivable (net);83,800;88,000;-4,200;Inventory;243,400;233,800;9,600;Prepaid expenses;25,400;24,200;1,200;Current liabilities;Accounts payable;$123,600;$140,600;($17,000);Taxes payable;43,600;49,200;-5,600;Interest payable;9,000;6,400;2,600;Accrued liabilities;38,800;60,400;-21,600;Note payable;44,000;?;44,000;The accounts payable were for the purchase of merchandise. Prepaid;expenses and accrued liabilities relate to the firm's selling and;administrative expenses. The company's condensed income statement follows.;SIGN;GRAPHICS INC.;Income;Statement;for;the Year Ended December 31, 20x5;Sales;$713,800;Less: Cost of goods sold;323,000;Gross profit;$390,800;Less: Selling;administrative expenses;$186,000;Depreciation expense;17,000;Interest expense;27,000;230,000;Add: gain on sale of land;$160,800;21,800;Income before taxes;$182,600;Income taxes;36,800;Net income;$145,800;Other data;1.;Long-term;investments were purchased for cash at a cost of $74,600.;2.;Cash;proceeds from the sale of land totaled $76,200.;3.;Store;equipment of $44,000 was purchased by signing a short-term note payable. Also;a $150,000 telecommunications system was acquired by issuing 3,000 shares of;preferred stock.;4.;A long-term;note of $49,400 was repaid.;5.;Twenty;thousand shares of common stock were issued at $5.19 per share.;6.;The company;paid cash dividends amounting to $128,600.;Instructions;a.;Prepare the;operating activities section of the company's statement of cash flows, assuming;use of;1.;The direct;method.;2.;The;indirect method.;b.;Prepare the;investing and financing activities sections of the statement of cash flows.

 

Paper#40341 | Written in 18-Jul-2015

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