Financial Accounting: Tools for Business Decision Making, 8th Edition
8th Edition
ISBN: 9781118953808
Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Publisher: WILEY
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Chapter 2, Problem 2.2AP
To determine
Income statement: The financial statement which reports revenues and expenses from business operations, and the result of those operations as net income or net loss for a particular time period is referred to as income statement.
Balance sheet: This financial statement reports a company’s resources (assets) and claims of creditors (liabilities) and stockholders (
Classified balance sheet: The main components of balance sheet are categorized or classified further into sections in a classified balance sheet. Assets are further classified as current assets, long-term investments, property, plant, and equipment (PPE), and intangible assets. Liabilities are classified into two sections current and long-term. Stockholders’ equity comprises of common stock and retained earnings.
To prepare: Income statement, retained earnings statement, and balance sheet of Corporation M as of December 31, 2017
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Financial information for Powell Panther Corporation is shown below:
Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2018
2017
Sales
$
1,800.0
$
1,500.0
Operating costs excluding depreciation and amortization
1,395.0
1,275.0
EBITDA
$
405.0
$
225.0
Depreciation and amortization
43.0
39.0
Earnings before interest and taxes (EBIT)
$
362.0
$
186.0
Interest
40.0
33.0
Earnings before taxes (EBT)
$
322.0
$
153.0
Taxes (40%)
128.8
61.2
Net income
$
193.2
$
91.8
Common dividends
$
174.0
$
73.0
Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2018
2017
Assets
Cash and equivalents
$
23.0
$
18.0
Accounts receivable
248.0
225.0
Inventories
396.0
360.0
Total current assets
$
667.0
$
603.0
Net plant and equipment
429.0
390.0
Total assets
$
1,096.0
$
993.0
Liabilities and Equity
Accounts…
Financial information for Powell Panther Corporation is shown below:
Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2018
2017
Sales
$
3,900.0
$
3,000.0
Operating costs excluding depreciation and amortization
2,925.0
2,550.0
EBITDA
$
975.0
$
450.0
Depreciation and amortization
90.0
69.0
Earnings before interest and taxes (EBIT)
$
885.0
$
381.0
Interest
86.0
66.0
Earnings before taxes (EBT)
$
799.0
$
315.0
Taxes (40%)
319.6
126.0
Net income
$
479.4
$
189.0
Common dividends
$
431.0
$
151.0
Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2018
2017
Assets
Cash and equivalents
$
38.0
$
30.0
Accounts receivable
432.0
360.0
Inventories
819.0
630.0
Total current assets
$
1,289.0
$
1,020.0
Net plant and equipment
897.0
690.0
Total assets
$
2,186.0
$
1,710.0
Liabilities and Equity…
The current sections of Bridgeport Corp.'s balance sheets at December 31, 2016 and 2017, are presented here. Bridgeport Corp.'s net income for 2017 was $153,459. Depreciation expense was $27,081.
2017
2016
Current assets
Cash
$105,315
$ 99,297
Accounts receivable
80,240
89,267
Inventory
168,504
172,516
Prepaid expenses
27,081
22,066
Total current assets
$381,140
$383,146
Current liabilities
Accrued expenses payable
$ 15,045
$ 5,015
Accounts payable
85,255
92,276
Total current liabilities
$100,300
$ 97,291
ember 31, 2017, using
Prepare the net cash provided (used) by operating activities section of the company's statement
(15,000).)
cash flows
or the year ende
indirect
ethod. (Show am
that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g.
Bridgeport Corp.
Partial Statement of Cash Flows
$
Adjustments to reconcile net income to
$
$1
Chapter 2 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
Ch. 2 - What is meant by the term operating cycle?Ch. 2 - Define current assets. What basis is used for...Ch. 2 - Prob. 3QCh. 2 - Prob. 4QCh. 2 - Prob. 5QCh. 2 - Prob. 6QCh. 2 - Prob. 7QCh. 2 - Prob. 8QCh. 2 - What do these classes of ratios measure? (a)...Ch. 2 - Prob. 10Q
Ch. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - (a) What is the primary objective of financial...Ch. 2 - Merle Hawkins, the president of Pathway Company,...Ch. 2 - Prob. 15QCh. 2 - Prob. 16QCh. 2 - Prob. 17QCh. 2 - Prob. 18QCh. 2 - What is the economic entity assumption? Give an...Ch. 2 - Prob. 20QCh. 2 - The following are the major balance sheet...Ch. 2 - Prob. 2.2BECh. 2 - Prob. 2.3BECh. 2 - Prob. 2.4BECh. 2 - Prob. 2.5BECh. 2 - Prob. 2.6BECh. 2 - Prob. 2.7BECh. 2 - Prob. 2.8BECh. 2 - Here are some qualitative characteristics of...Ch. 2 - Prob. 2.10BECh. 2 - Prob. 2.1ADIECh. 2 - Prob. 2.1BDIECh. 2 - Prob. 2.2DIECh. 2 - The following characteristics, assumptions,...Ch. 2 - Prob. 2.1ECh. 2 - The major balance sheet classifications are listed...Ch. 2 - Prob. 2.3ECh. 2 - Prob. 2.4ECh. 2 - Prob. 2.5ECh. 2 - Prob. 2.6ECh. 2 - Prob. 2.7ECh. 2 - Prob. 2.8ECh. 2 - Nordstrom, Inc. operates department stores in...Ch. 2 - Prob. 2.10ECh. 2 - Prob. 2.11ECh. 2 - Prob. 2.12ECh. 2 - Prob. 2.13ECh. 2 - Prob. 2.1APCh. 2 - Prob. 2.2APCh. 2 - Prob. 2.3APCh. 2 - Prob. 2.4APCh. 2 - Prob. 2.5APCh. 2 - Prob. 2.6APCh. 2 - Prob. 2.7APCh. 2 - Prob. 2.8APCh. 2 - Prob. 2.1EYCTCh. 2 - Prob. 2.2EYCTCh. 2 - Prob. 2.3EYCTCh. 2 - Prob. 2.4EYCTCh. 2 - Prob. 2.7EYCTCh. 2 - Prob. 2.8EYCTCh. 2 - Prob. 2.9EYCTCh. 2 - ETHICS CASE At one time, Boeing closed a giant...Ch. 2 - In what ways does the format of a statement of...Ch. 2 - Prob. 2.2IFRSCh. 2 - Prob. 2.3IFRSCh. 2 - Prob. 2.4IFRSCh. 2 - Prob. 2.5IFRS
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