Forten Company's current year income statement, comparative balance sheets, and additional information follow. 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. Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated Total assets Liabilities and Equity Accounts payable Short-tern notes payable Total current liabilities Long-tern notes payable Total liabilities depreciation-Equipment Equity Common stock, $5 par value FORTEN COMPANY Comparative Balance Sheets December 31 Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity FORTEN COMPANY Income Statement For Current Tear Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income $20,750 132,400 Current Year $ 49,800 65,810 275,656 1,250 $ 513,391 $ 53,141 10,000 392,516 157,500 128,141 162,750 37,500 105,000 $513,391 $582,500 285,000 297,500 153,150 139,225 24,250 $ 114,975 Prior Year $ 73,500 50,625 251,000 377,800 108,000 (46,000) $439,800 $ 114,675 6,000 120,675 150,250 120,125 $ 439,800 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $5,125 (details in bj. b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash. c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance. d. Borrowed $4,000 cash by signing a short-term note payable. e. Paid $50,125 cash to reduce the long-term notes payable. f. Issued 2,500 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $50,100.

Forten Company's current year income statement, comparative balance sheets, and additional information follow. 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. Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accumulated Total assets Liabilities and Equity Accounts payable Short-tern notes payable Total current liabilities Long-tern notes payable Total liabilities depreciation-Equipment Equity Common stock, $5 par value FORTEN COMPANY Comparative Balance Sheets December 31 Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity FORTEN COMPANY Income Statement For Current Tear Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income $20,750 132,400 Current Year $ 49,800 65,810 275,656 1,250 $ 513,391 $ 53,141 10,000 392,516 157,500 128,141 162,750 37,500 105,000 $513,391 $582,500 285,000 297,500 153,150 139,225 24,250 $ 114,975 Prior Year $ 73,500 50,625 251,000 377,800 108,000 (46,000) $439,800 $ 114,675 6,000 120,675 150,250 120,125 $ 439,800 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $5,125 (details in bj. b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash. c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance. d. Borrowed $4,000 cash by signing a short-term note payable. e. Paid $50,125 cash to reduce the long-term notes payable. f. Issued 2,500 shares of common stock for $20 cash per share. g. Declared and paid cash dividends of $50,100.

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter8: Internal Control And Cash

Section: Chapter Questions

Problem 5PEB

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