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Accounting 202 Two Problems - Forten Company& GOLDEN CORPORATION

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Question;Problem 12-2AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4;Forten Company, a merchandiser, recently completed its calendar-year 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company?s balance sheets and income statement follow.;FORTEN COMPANY Comparative Balance Sheets December 31, 2013 and 20122013 2012Assets Cash $ 49,200 $ 73,000 Accounts receivable 65,890 57,000 Merchandise inventory 276,500 253,000 Prepaid expenses 1,250 1,900 Equipment 158,000 106,500 Accum. depreciation?Equipment (36,500) (46,000) Total assets $ 514,340 $ 445,400 Liabilities and Equity Accounts payable $ 63,590 $ 111,000 Short-term notes payable 10,000 6,000 Long-term notes payable 62,500 48,250 Common stock, $5 par value 162,250 150,750 Paid-in capital in excess of par, common stock 34,500 0 Retained earnings 181,500 129,400 Total liabilities and equity $ 514,340 $ 445,400;FORTEN COMPANY Income Statement For Year Ended December 31, 2013Sales $ 582,500 Cost of goods sold 289,000 Gross profit 293,500 Operating expenses Depreciation expense $ 20,000 Other expenses 134,000 154,000 Other gains (losses) Loss on sale of equipment (5,500) Income before taxes 134,000 Income taxes expense 25,500 Net income $ 108,500 Additional Information on Year 2013 Transactions;a. Net income was $108,500.b. Accounts receivable increased.c. Merchandise inventory increased.d. Prepaid expenses decreased.e. Accounts payable decreased.f. Depreciation expense was $20,000.g. Sold equipment costing $46,500, with accumulated depreciation of $29,500, for $11,500 cash. This yielded a loss of $5,500.h. Purchased equipment costing $98,000 by paying $30,000 cash and (i.) by signing a long-term note payable for the balance.j. Borrowed $4,000 cash by signing a short-term note payable.k. Paid $53,750 cash to reduce the long-term notes payable.l. Issued 2,300 shares of common stock for $20 cash per share.m. Declared and paid cash dividends of $56,400.;Required:Prepare a complete statement of cash flows using a spreadsheet, report its operating activities using the indirect method. (Enter all amounts as positive values.);Golden Corp., a merchandiser, recently completed its 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company?s balance sheets and income statement follow.hiododf CORPORATIONComparative Balance SheetsDecember 31, 2013 and 20122013 2012AssetsCash $ 163,000 $ 135,000Accounts receivable 84,000 72,000Merchandise inventory 625,000 515,000Equipment 345,000 269,000Accum. depreciation?Equipment (156,000) (103,000)Total assets $ 1,061,000 $888,000Liabilities and EquityAccounts payable $ 164,000 $ 103,000Income taxes payable 26,000 23,000Common stock, $2 par value 590,000 568,000Paid-in capital in excess of par value, common stock 197,000 164,000Retained earnings 84,000 30,000Total liabilities and equity $ 1,061,000 $ 888,000GOLDEN CORPORATIONIncome StatementFor Year Ended December 31, 2013Sales $ 1,800,000Cost of goods sold 1,088,000Gross profit 712,000Operating expensesDepreciation expense $ 53,000Other expenses 499,000 552,000Income before taxes 160,000Income taxes expense 21,000Net income $ 139,000Additional Information on Year 2013 Transactionsa.Purchased equipment for $76,000 cash.b.Issued 11,000 shares of common stock for $5 cash per share.c.Declared and paid $85,000 in cash dividends.Required:Prepare a complete statement of cash flows, report its cash inflows and cash outflows from operating activities according to the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

 

Paper#43777 | Written in 18-Jul-2015

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