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Problem 1: (50 points) This Problem may look a bit...

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Problem 1: (50 points) This Problem may look a bit familiar (I used much of the information provided in one of your online homework problems but it is not identical so be careful and read through the problem thoroughly). On December 31, 2010, The Walsh Company had the following balances in its balance sheet accounts: Paid-in Capital $ 100,000 Gross Accounts Receivable $ 151,000 Accumulated Depreciation on PPE $ 613,000 Mortgage Notes Payable $ 560,000 Income Taxes Payable $ 230,000 Prepaid Expenses (Taxes/Insurance) $ 30,000 Retained Earnings $ 297,000 Cash $ 73,000 Inventory $ 689,000 Allowance for Doubtful Accts. $ 12,000 Plant/Property/Equipment (PPE) $ 912,000 Trade Accounts Payable $ 123,000 Other Long-term Debt $ 115,000 Land $ 195,000 The following information pertains to the Walsh Company and its operations during calendar year 2011: 1) The company purchased $ 1,125,000 worth of inventory during the year, all on credit. Its ending inventory on December 31, 2011 totaled $ 667,000. 2) The company had sales totaling $1,900,000. All sales were on credit. 3) Company management assumed for the year that 1% of its credit sales would be uncollectible and recorded these credit sales as bad debt. 4) For the year, the company paid $1,150,000 total cash towards its trade accounts payable. 5) During the year, $30,000 worth of accounts receivable were determined to be uncollectible. 6) The company collected cash on accounts receivable totaling $1,890,000. 7) The company recognized $20,000 worth of property tax expense and $10,000 worth of insurance expense for the year. Both of these expenses had previously been recognized as prepaid expenses. 8) Salary expenses totaled $190,000; Office expenses totaled $55,000; and Selling/Administrative Expenses totaled $89,000. All of these expenses were paid with cash. 9) Interest expense, paid with cash, totaled $70,000. 10) The company made principal payments of $45,000 on its mortgage note and $15,000 on other long-term debts it owes. 11) The company recognized $42,000 of straight-lined depreciation expense. 12) The company paid off its income taxes payable totaling $230,000 using cash. 13) The income tax expense for the year 2011 is $100,000. The 2011 income taxes will be paid in 2012. (2011 income taxes are recorded as ?Income Taxes Payable? in 2011.) 14) The company declared and paid $80,000 in cash dividends to its owners. 15) Net Income for 2011 is $158,000. Complete the items below using the information presented above and on the preceding page,. Watch the dates for the items that I am requesting!! Show how you arrived at your answer for partial credit!! A) Prepare and attach a properly formatted Balance Sheet for the Walsh Company dated December 31, 2010. (25 points) B) Determine the balance for ?Cash? as of December 31, 2011. Show how you arrived at your answer. To solve this, IT IS NOT NECESSARY to develop/create a cash flow statement but be sure you show me how you arrived at your answer for partial credit in the event you arrive at an incorrect answer. (20 points) C) Determine the balance for Retained Earnings as of December 31, 2011. There is no partial credit for this one ? you either get it right and get five points or you get it wrong and get zero. (5 points) Problem 2: (50 points) The CFO for Fin Tackle Company, a retailer of fishing supplies, has provided you the following information from the company's accounting records. From the information presented, prepare a properly formatted, multi-step Income Statement (i.e. showing ALL of the appropriate intermediate profit point lines). Per share presentation of income data is not being requested. Balance sheet account information is as of the close of business for December 31, 2011 unless otherwise indicated. Income statement information is applicable for the entire calendar year 2011 unless otherwise indicated. The company's income tax rate is 35%. The company did not purchase or dispose of any depreciable long-term assets. (Watch out - you may have more information than is needed to complete this problem). Sales/Revenues $600,000 Property Tax Expense 80,000 Cash 10,000 Selling Expenses 20,000 Unearned Revenues 15,000 Prepaid Insurance 10,000 General and Administrative Expenses 15,000 Purchases of Goods for sale 75,000 Inventory available for sale as of 1/1/2011 100,000 Inventory available for sale as of 12/31/2011 95,000 Accum. Depreciation on Plant, Property, Equipment (as of 1/1/11) 120,000 Accum. Depreciation on Plant, Property, Equipment (as of 12/31/11) 160,000 Plant, Property and Equipment 500,000 Long-term debt 50,000 Dividends declared and paid to shareholders 40,000 Dividend Income 45,000 Interest Income 3,000 Interest Expense 12,000 Net Accounts Receivable 15,000 Retained Earnings 60,000 Infrequent expense associated with a weather event 3,000 Accounts Payable 15,000 Bad Debt Expense 10,000

 

Paper#8039 | Written in 18-Jul-2015

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