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PXE Company presented the following comparative balance

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Question;PXE Company presented the following comparative balanceP1. PXE Company presented the following comparative balance sheets at December 31, 2005 and 2006, and the income statement for the year ended December 31, 2006:PXE CompanyBalance SheetsDecember 31, 2006 and 2005December 31, 2006 December 31, 2005Assets Cash $ 12,200 $ 28,200Accounts receivable 16,000 18,000Inventory 19,500 22,000Prepaid rent 200 300Total current assets $ 47,900 $ 68,500Land 58,000 30,000Equipment 65,000 60,000Accumulated depreciation (11,000) (4,000)Total assets $159,900 $154,500Liabilities and stockholders? equity Accounts payable $ 13,000 $ 25,000Salaries payable 2,000 2,500Interest payable 2,500 4,000Incometax payable 6,500 3,000Dividends payable 4,000 0Total current liabilities $ 28,000 $ 34,500Long-term notes payable 10,000 40,000Common stock, $1 par 30,000 28,000Preferred stock, $4 par 24,000 10,000Additional paid-in capital 45,000 30,000Retained earnings 22,900 12,000Total liabilities and stockholders? equity $159,900 $154,500PXE CompanyIncome StatementFor the Year Ended December 31, 2006Sales $ 400,000Cost of goods sold (250,000)Gross profit $ 150,000General and administrative expenses $80,000 Salaries expense 31,000 Rent expense 3,600 Depreciation expense 7,000 Total operating expenses (121,600)Other revenue and expenses: Gain on sale of land $ 3,000 Interest revenue 300 Interest expense (2,800) 500Income before income taxes $ 28,900Income taxexpense (8,000)Net income $ 20,900Additional information:a. The company declared dividends in the amount of $10,000 during the year.b. Additional land and equipment were purchased for cash.c. Land that had originally cost $9,000 was sold for $12,000 cash.d. All accounts payable are related to merchandise purchases.e. The company uses a perpetual LIFO inventory system and uses straight-line depreciation for all depreciable assets.Required:1. Prepare the operating activities section of the statement of cash flows using the indirect method.P2. Salary expense on the books was $43000. Salary payable at the beginning of the year was $11000 and at the end of the year was $12500. How much cash was paid out for salaries?P3. Rent expense on the books was $15000. Prepaid rent at the beginning of the year was $3000 and at the end of the year was $1250. How much cash was paid out for rent?P4. Sales revenue on the books was $118000. Accounts receivable at the end of the year was $14000 and accounts receivable at the beginning of the year was $16000. How much cash was received for sales?P5. Sales revenue on the books was $175000. Unearned revenue at the end of the year was $12000 and unearned revenue at the beginning of the year was $4500. How much cash was received from revenue?P6. Harp?s Business Machines Inc. reported the following items from its comparative balance sheet for the calendaryear 2008:2008 2007Inventory $125,000 $100,000Land 100,000 200,000Building 570,000 500,000Equipment 45,000 30,000Accumulated depreciation (105,000) (50,000)Notes payable 100,000 150,000Common stock 300,000 200,000Additional information for 2008:1. A piece of land was sold for $65,000, resulting in a $5,000 gain.2. A smaller section of land was sold for $26,000, resulting in a $14,000 loss.3. A building was started and completed costing $70,000. All costs were paid in cash.4. Depreciation expense totaled $55,000 for the year.Required:Determine the cash flows from investing activities for Harp?s Business Machines Inc. for 2008.P7. Checker?s Games Co. reported the following items on its comparative balance sheet for 2008:2008 2007Accounts payable $200,000 $175,000Dividends payable 10,000 0Notes payable 280,000 240,000Common stock 315,000 290,000Additional paid-in capital 120,000 100,000Land 175,000 150,000Goodwill 45,000 75,000Additional information for 2008:1. A $70,000 note payable was issued for cash.2. Interest expense totaled $15,000 for the year of which $13,500 was paid in cash.3. Stock was issued for cash (the transaction involved common stock).4. A note payable for $30,000 was repaid.5. Dividends of $50,000 were declared of which $40,000 have been paid.Required: Prepare the financing section of the cash flow statement in good form for Checker?s Games Co.P8. On January 1, 2006, ABC Company bought equipment for $12,000 with an estimated useful life of 5 years and no salvage value. ABC uses straight-line depreciation. On January 1, 2008, it was decided that the sum-of-the-years-digits was more appropriate.What journal entry do you make on January 1, 2008?

 

Paper#44695 | Written in 18-Jul-2015

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