Financial Accounting
9th Edition
ISBN: 9781259222139
Author: Robert Libby, Patricia Libby, Frank Hodge Ch
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 1, Problem 1.11E
Preparing an Income Statement and
Painter Corporation was organized by five individuals on January 1 of the current year. At the end of January of the current year, the following monthly financial data are available:
| Total revenues | $305,000 |
| Total expenses (excluding income taxes) | 189,000 |
| Income tax expense (all unpaid as of January 31) | 35,000 |
| Cash balance. January 31 | 65,150 |
| Receivables from customers (all considered collectible) | 44,700 |
| Merchandise inventory (by inventory count at cost) | 94,500 |
| Payables to suppliers for merchandise purchased from them (will be paid during February of the current year) | 25,950 |
| Common stock | 62,400 |
No dividends were declared or paid during January.
Required:
Complete the following two statements:
| PAINTER CORPORATION Income Statement For the Month of January, Current Year |
|
| Total revenues | $ |
| Less: Total expenses (excluding income tax) | ______ |
| Pretax income | ______ |
| Less: Income tax expense | ______ |
| Net income | $ |
| PAINTER CORPORATION Balance Sheet At January 31, Current Year |
|
| Assets | |
| Cash | $ |
| Receivables from customers | ______ |
| Merchandise inventory | ______ |
| Total assets | $ |
| Liabilities | ______ |
| Payables to suppliers | $ |
| Income taxes payable | ______ |
| Total liabilities | ______ |
| Stockholders’ Equity | |
| Common stock | ______ |
| ______ | |
| Total stockholders’ equity | ______ |
| Total liabilities and stockholders’ equity | ______ |
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Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts
at December 31 of the prior year were inventory. $49,900: total assets. $209,400; common stock, $87,000; and retained earnings,
$41,829.)
CABOT CORPORATION
Balance Sheet
December 31
Assets
Liabilities and Equity
Cash
Short-term investments
Accounts receivable, net
Merchandise inventory
18, 000 Accounts payable
9, 200
30, 800 Income taxes payable
40,150 Long-term note payable, secured by
18,500
3, 800
4,400
65,400
Accrued wages payable
mortgage on plant assets
Prepaid expenses
Plant assets, net
2,800 Common stock
151, 300 Retained earnings
$ 252, 250 Total liabilities and equity
87, e00
73,150
$ 252, 250
Total assets
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
$ 453, 600
297,850
155,750
98, 500
4,800
52,450
21,129
Sales
Cost of goods sold
Gross profit
Operating expenses
Interest expense
Income before taxes
Income tax expense
Net…
Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were
Inventory, $49,900; total assets, $259,400; common stock, $87,000; and retained earnings, $28,750.)
Assets
Cash
Short-term investments
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
Sales
CABOT CORPORATION
Balance Sheet
December 31 of current year
Liabilities and Equity
$ 12,000
Accounts payable
$ 17,500
8,400
Accrued wages payable
4,800
31,200
Income taxes payable
3,300
36,150
3,050
148,300
Long-term note payable, secured by mortgage on plant assets
68,400
Common stock
87,000
Retained earnings
58,100
$ 239,100
Total liabilities and equity
$ 239,100
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
$ 451,600
Cost of goods sold
Gross profit
Operating expenses
Interest expense
Income before taxes
Income tax expense
Net income
298,250
153,350
99,400…
Statement of financial position of Fernandez Co
The following selected accounts and their current balances appear in the ledger of Fernandez Co. at the end of its fiscal year.
Cash
$250,000 Retained Earnings
2,850,000
Accounts Receivable
1,197,000 Dividends
50,000
Inventory
1,790,000 Sales
9,350,000
Estimated Returns Inventory
23,500 Cost of Goods Sold
5,840,000
Office Supplies
14,000 Sales Salaries Expense
820,000
Prepaid Insurance
8,500 Advertising Expense
350,000
Office Equipment
870,000 Depreciation Expense-Store Equipment
120,000
Accumulated Depreciation-Office Equipment
580,000 Miscellaneous Selling Expense
58,000
Store Equipment
2,600,000 Office Salaries Expense
550,000
Accumulated Depreciation-Store Equipment
820,000 Rent Expense
104,000
Accounts Payable
336,000 Depreciation Expense-Office Equipment
60,000
Customer Refunds Payable
39,000 Insurance Expense
50,000
Salaries Payable
43,000 office Supplies Expense
26,000
Notes Payable (long-term)
200,000 Miscellaneous Administrative…
Chapter 1 Solutions
Financial Accounting
Ch. 1 - Define accounting.Ch. 1 - Briefly distinguish financial accounting from...Ch. 1 - Prob. 3QCh. 1 - Prob. 4QCh. 1 - Prob. 5QCh. 1 - Complete the following: Name of Statement...Ch. 1 - What information should be included in the heading...Ch. 1 - What are the purposes of (a) the income statement,...Ch. 1 - Explain why the income statement and the statement...Ch. 1 - Prob. 10Q
Ch. 1 - Prob. 11QCh. 1 - Explain the equation for the income statement....Ch. 1 - Explain the equation for the balance sheet. Define...Ch. 1 - Explain the equation for the statement of cash...Ch. 1 - Explain the equation for retained earnings....Ch. 1 - The financial statements discussed in this chapter...Ch. 1 - Prob. 17QCh. 1 - Prob. 18QCh. 1 - (Supplement A) Briefly differentiate between a...Ch. 1 - Prob. 20QCh. 1 - Which of the following is not one of the four...Ch. 1 - Prob. 2MCQCh. 1 - Prob. 3MCQCh. 1 - Which of the following regarding retained earnings...Ch. 1 - Which of the following is not one of the four...Ch. 1 - Prob. 6MCQCh. 1 - Prob. 7MCQCh. 1 - Which of the following is true regarding the...Ch. 1 - Prob. 9MCQCh. 1 - Prob. 10MCQCh. 1 - Matching Elements with Financial Statements M1-1...Ch. 1 - Matching Financial Statement Items to Financial...Ch. 1 - Prob. 1.3MECh. 1 - Prob. 1.1ECh. 1 - Matching Financial Statement Items to Financial...Ch. 1 - Matching Financial Statement Items to Financial...Ch. 1 - Preparing a Balance Sheet Honda Motor Corporation...Ch. 1 - Completing a Balance Sheet and Inferring Net...Ch. 1 - Prob. 1.6ECh. 1 - Preparing an Income Statement and Inferring...Ch. 1 - Prob. 1.8ECh. 1 - Inferring Values Using the Income Statement and...Ch. 1 - Inferring Values Using the Income Statement and...Ch. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Preparing a Statement of Stockholders Equity...Ch. 1 - Focus on Cash Flows: Matching Cash Flow Statement...Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Analyzing a Student's Business and Preparing an...Ch. 1 - Comparing Income with Cash Flow (Challenging)...Ch. 1 - Evaluating Data to Support a Loan Application...Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Analyzing a Students Business and Preparing an...Ch. 1 - Prob. 1.3APCh. 1 - Prob. 1.1CONCh. 1 - Finding Financial Information LO1-1 Refer to the...Ch. 1 - Prob. 1.2CPCh. 1 - Comparing Companies within an Industry Refer to...Ch. 1 - Using Financial Reports: Identifying and...Ch. 1 - Prob. 1.5CPCh. 1 - Prob. 1.6CPCh. 1 - Prob. 1.7CP
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