Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 2, Problem 3E
a.
To determine
Record the events in the
b.
To determine
Prepare the income statement, statement of changes in
c.
To determine
Explain the reason for the difference in the net income and the amount of net cash flow from the operating activities.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Problem 1:
RM Company disclosed the following information on December 31, 2021:
Accrued rent expense
Share dividends payable
Accounts receivable, after deducting credit balances of customers'
accounts amounting to P42, 500
Estimated premium liability
Cash in bank, net of bank overdraft of P22,650
Deferred tax liability
Accounts payable, net of debit balances in suppliers' accounts
amounting to P8,310
Unearned interest income
54,000
750,000
179,300
65,800
481,900
215,500
95,420
225,000
1,500,000
Mortgage payable, issued on March 1, 2012, maturing after 10 years
Notes payable due to bank, 12% interest bearing note payable yearly,
issued on August 31, 2021, maturing on August 31, 2022
Cash dividends payable
SSS payable
Serial bonds payable in 5 yearly installment of P250,000 payable
every October 31
Estimated damages because of a supposed unsatisfactory
„performance on a contract, a possible obligation
Income tax payable
Notes payable
1,000,000
520,000
57,100
1,250,000
75,000
138,500…
Problem 1:
RM Company disclosed the following information on December 31, 2021:
Accrued rent expense
Share dividends payable
Accounts receivable, after deducting credit balances of customers'
accounts amounting to P42, 500
Estimated premium liability
Cash in bank, net of bank overdraft of P22,650o
Deferred tax liability
Accounts payable, net of debit balances in suppliers' accounts
amounting to P8,310
Unearned interest income
54,000
750,000
179,300
65,800
481,900
215,500
95,420
225,000
Mortgage payable, issued on March 1, 2012, maturing after 10 years
Notes payable due to bank, 12% interest bearing note payable yearly,
issued on August 31, 2021, maturing on August 31, 2022
Cash dividends payable
SSS payable
Serial bonds payable in 5 yearly installment of P250,000 payable
every October 31
Estimated damages because of a supposed unsatisfactory
performance on a contract, a possible obligation
Income tax payable
Notes payable
1,500,000
1,000,000
520,000
57,100
1,250,000
75,000
138,500…
PART 2
Â
Ivanhoe Automotive’s balance sheet at the end of its most recent fiscal year shows the following information:
Ivanhoe AutomotiveBalance Sheet as of March 31, 2017
Assets:
Â
Liabilities and Equity:
Cash and marketable sec.
Â
$40,000
Â
Accounts payable and accruals
Â
$168,000
Accounts receivable
Â
158,000
Â
Notes payable
Â
27,000
Inventory
Â
232,000
Â
Â
Â
Â
    Total current assets
Â
$430,000
Â
    Total current liabilities
Â
$195,000
Â
Â
Â
Â
Long-term debt
Â
172,000
Â
Â
Â
Â
    Total liabilities
Â
$367,000
Net plant and equipment
Â
780,000
Â
Common stock
Â
317,000
Goodwill and other assets
Â
92,000
Â
Retained earnings
Â
618,000
Total assets
Â
$1,302,000
Â
Total liabilities and equity
Â
$1,302,000
In addition, it was reported that the firm had a net income of $159,000 on net sales of $4,200,000.Excel Template(Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values.…
Chapter 2 Solutions
Survey Of Accounting
Ch. 2 - 1. What does accrual accounting attempt to...Ch. 2 - 2. Define recognition. How is it independent of...Ch. 2 - 3. What does the term deferral mean?Ch. 2 - 4. If cash is collected in advance of performing...Ch. 2 - Prob. 5QCh. 2 - 6. What effect does the issue of common stock have...Ch. 2 - 7. How does the recognition of revenue on account...Ch. 2 - 8. Give an example of an asset source transaction....Ch. 2 - 9. When is revenue recognized under accrual...Ch. 2 - 10. Give an example of an asset exchange...
Ch. 2 - 11. What is the effect on the right side of the...Ch. 2 - Prob. 12QCh. 2 - Prob. 13QCh. 2 - Prob. 14QCh. 2 - Prob. 15QCh. 2 - Prob. 16QCh. 2 - 17. Why may net cash flow from operating...Ch. 2 - Prob. 18QCh. 2 - Prob. 19QCh. 2 - 20. What is the difference between a cost and an...Ch. 2 - Prob. 21QCh. 2 - Prob. 22QCh. 2 - 23. What does the term expense mean?Ch. 2 - Prob. 24QCh. 2 - 25. What is the purpose of the statement of...Ch. 2 - Prob. 26QCh. 2 - 27. Why is the balance sheet dated as of a...Ch. 2 - 28. In what order are assets listed on the balance...Ch. 2 - Prob. 29QCh. 2 - Prob. 30QCh. 2 - 31. What types of accounts are closed at the end...Ch. 2 - 32. Give several examples of period costs.Ch. 2 - 33. Give an example of a cost that can be directly...Ch. 2 - Prob. 34QCh. 2 - Prob. 1ECh. 2 - Exercise 2-2 Effect of accrued expenses on the...Ch. 2 - Prob. 3ECh. 2 - Prob. 4ECh. 2 - Prob. 5ECh. 2 - Prob. 6ECh. 2 - Prob. 7ECh. 2 - Prob. 8ECh. 2 - Exercise 2-9 Supplies on financial statements Yard...Ch. 2 - Prob. 10ECh. 2 - Exercise 2-11 Prepaid items on financial...Ch. 2 - Exercise 2-12 Effect of an error on financial...Ch. 2 - Exercise 2-13 Unearned items on financial...Ch. 2 - Prob. 14ECh. 2 - Prob. 15ECh. 2 - Prob. 16ECh. 2 - Prob. 17ECh. 2 - Prob. 18ECh. 2 - Prob. 19ECh. 2 - Prob. 20ECh. 2 - Exercise 2-21 Adjusting the accounts Norell Inc....Ch. 2 - Prob. 22ECh. 2 - Prob. 23ECh. 2 - Prob. 24ECh. 2 - Prob. 25ECh. 2 - Prob. 26ECh. 2 - Exercise 2-27 Identifying transaction type and...Ch. 2 - Exercise 2-27A Effect of accounting events on the...Ch. 2 - Prob. 29ECh. 2 - Exercise 2-29A Identifying source, use, and...Ch. 2 - Prob. 31ECh. 2 - Problem 2-32 Recording events in a horizontal...Ch. 2 - Problem 2-37A Effect of adjusting entries on the...Ch. 2 - Prob. 34PCh. 2 - Prob. 35PCh. 2 - Problem 2-36 Identifying and arranging elements on...Ch. 2 - Problem 2-37 Missing information in financial...Ch. 2 - Problem 2-38 Events for two complete accounting...Ch. 2 - Prob. 1ATCCh. 2 - ATC 2-3 Research Assignment Identifying accruals...Ch. 2 - ATC 2-4 Writing Assignment Revenue Recognition and...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Payroll accounts and year-end entries The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year: The following transactions relating to payroll, payroll deductions, and payroll taxes Occurred during December: Dec. 2. Issued Check No. 410 for 3,400 to Jay Bank to invest in a retirement savings account for employees. 2. Issued Check No. 411 to Jay Bank for 27,046, in payment of 9,273 of social security tax, 2,318 of Medicare tax, and 15,455 of employees federal income tax due. 13. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: Dec. 13. Issued Check No. 420 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 13. Journalized the entry to record payroll taxes on employees earnings of December13: social security tax, 4,632; Medicare tax, 1,158; state unemployment tax, 350; federal unemployment tax, 125. 16. Issued Check No. 424 to Jay Bank for 27,020, in payment of 9,264 of social security tax, 2,316 of Medicare tax, and 15,440 of employees federal income tax due. 19. Issued Check No. 429 to Sims-Walker Insurance Company for 31,500, in payment of the semiannual premium on the group medical insurance policy. 27. Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: 27. Issued Check No. 541 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 27. Journalized the entry to record payroll taxes on employees earnings of December27: social security tax, 4,668; Medicare tax, 1,167; state unemployment tax, 225; federal unemployment tax, 75. 27. Issued Check No. 543 for 20,884 to State Department of Revenue in payment of employees state income tax due on December 31. 31. Issued Check No. 545 to Jay Bank for 3,400 to invest in a retirement savings account for employees. 31. Paid 45,000 to the employee pension plan. The annual pension cost is 60,000. (Record both the payment and unfunded pension liability.) Instructions 1. Journalize the transactions. 2. Journalize the following adjusting entries on December 31: a. Salaries accrued: operations salaries, 8,560; officers salaries, 5,600; office salaries,1,400. The payroll taxes are immaterial and are not accrued. b. Vacation pay, 15,000.arrow_forwardRetirement of Debt M Company is preparing its statement of cash flows for the current year. During the year, the company retired two issuances of debt and properly recorded the transactions. These transactions were as follows: Paid cash of $16,400 to retire bonds payable with a face value of $18,000 and a book value of $16,800. Paid cash of $46,000 to retire bonds payable with a face value of $43,000 and a book value of $45,000. Required: Record, in journal entry form, the entries that M would make for the preceding transactions on its spreadsheet to prepare its statement of cash flows. If an amount box does not require an entry, leave it blank.   DESCRIPTION DOC. NO. POST. REF. DEBIT CREDIT (1)    fill in the blank 2 fill in the blank 3          fill in the blank 5 fill in the blank 6       Cash Flows from Financing Activities:                 fill in the blank 8 fill in the blank 9       Net Cash Flow from Operating Activities:…arrow_forwardPLEASE ANSWER ASAP Problem No. 1 AACA Corporation was incorporated on Dec. 1, 2021, and began operations one week later. Before closing the books for the fiscal year ended Nov. 30, 2022, the controller prepared the following financial statements: AACA Corporation Statement of Financial Position November 30, 2022 Assets  Current assets   Cash P150,000  Marketable securities, at cost  60,000  Accounts receivable  450,000  Allowance for doubtful accounts  ( 59,000)  Inventories 430,000  Prepaid insurance   15,000  Total current assets  1,046,000 Property, plant and equipment  426,000 Less accumulated depreciation  (  40,000)   Property, plant and equipment, net     386,000 Research and development costs     120,000 Total assets P1,552,000   Liabilities and Shareholders' Equity      Current liabilities    Accounts payable and accrued expenses P 592,000…arrow_forward
- Current Attempt in Progress The following selected accounts from Swifty Corporation's general ledger are presented below for the year ended December 31, 2021: Accounts payable $115,640 Equipment $1,963,520 Accounts receivable 174,640 Income tax expense 155,760 Accumulated depreciation-equipment 676,140 Insurance expense 151,040 Cash 14,160 Inventory 441,320 Common shares 354.000 Prepaid expenses 53,100 Cost of goods sold 2,271,500 Retained earnings 797,680 Depreciation expense 328,040 Salaries expense 1,086,780 Sales 4,696,400 (a) Prepare a single-step statement of income. SWIFTY CORPORATION Statement of Income (Single-step)arrow_forwardCurrent Position Analysis The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:    Current Year     Previous YearCurrent assets:               Cash   $577,600        $448,800     Marketable securities   668,800        504,900     Accounts and notes receivable (net)   273,600        168,300     Inventories   601,900        442,900     Prepaid expenses   310,100        283,100        Total current assets   $2,432,000        $1,848,000    Current liabilities:               Accounts and notes payable             (short-term)   $440,800        $462,000     Accrued liabilities   319,200        198,000        Total current liabilities   $760,000        $660,000    a.  Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.         Current…arrow_forwardDenna Company's working capltal accounts at the beginning of the year follow Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Accounts payable Notes due within one year Accrued liabilities $ 85,eee $ 25,600 S 386,000 $ 499, 000 S 18, See $ 227,000 $ 130,eee $ 73,500 During the year, Denna Company completed the following transactions: x. Paid a cash dividend previously declared, $45,000. a. Issued additional shares of common stock for cash. $230,000. b Sold inventory costing $82.000 for $115,000, on account c. Wrote off uncollectible accounts in the amount of $16,000, reducing the accounts recelvabie balance accordingly d. Declared a cash dividend, $45.000. e Paid accounts payable, $124,000. f Borrowed cash on a short-term note with the bank, $82,500 g. Sold inventory costing $19,500 for $13,000 cash. h. Purchased Inventory on account. $61.250. 1. Pald off all short-term notes due, $212,500. J. Purchased equipment for cash, $87,000. k. Sold marketable…arrow_forward
- Current Position Analysis The following data were taken from the balance sheet of Albertini Company at the end of two recent fiscal years:  Current Year  Previous Year Current assets:        Cash $446,900   $372,400    Marketable securities 517,400   419,000    Accounts and notes receivable (net) 211,700   139,600    Inventories 1,071,800   807,000    Prepaid expenses 552,200   516,000     Total current assets $2,800,000   $2,254,000  Current liabilities:        Accounts and notes payable       (short-term) $324,800   $343,000    Accrued liabilities 235,200   147,000     Total current liabilities $560,000   $490,000   a.  Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.    Current Year   Previous Year 1.  Working capital $fill in the blank 1 $fill in the blank 2 2.  Current ratio fill in the blank 3 fill in the blank…arrow_forwardCurrent Position Analysis The following data were taken from the balance sheet of Albertini Company at the end of two recent fiscal years:  Current Year Previous Year Current assets:   Cash $273,600 $201,600 Marketable securities 316,800 226,800 Accounts and notes receivable (net) 129,600 75,600  Inventories 760,300 589,300  Prepaid expenses 391,700 376,700  Total current assets $1,872,000 $1,470,000 Current liabilities:   Accounts and notes payable    (short-term) $278,400 $294,000 Accrued liabilities 201,600 126,000 Total current liabilities $480,000 $420,000 a.  Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.   Current Year Previous Year 1.  Working capital $ $ 2.  Current ratio   3.  Quick ratio   b.  The liquidity of Albertini has improved  from the preceding year to the current year. The working capital, current ratio, and quick ratio have…arrow_forwardCategory Prior Year Current Year Accounts payable 3,159.00 5,955.00 Accounts receivable 6,974.00 8,952.00 Accruals 5,771.00 6,100.00 Additional paid in capital 19,965.00 13,214.00 Cash ??? ??? Common Stock 2,850 2,850 COGS 22,509.00 18,563.00 Current portion long-term debt 500 500 Depreciation expense 1,044.00 984.00 Interest expense 1,285.00 1,168.00 Inventories 3,015.00 6,719.00 Long-term debt 16,894.00 22,766.00 Net fixed assets 75,882.00 73,989.00 Notes payable 4,022.00 6,500.00 Operating expenses (excl. depr.) 19,950 20,000 Retained earnings 35,811.00 34,391.00 Sales 46,360 45,993.00 Taxes 350 920 What is the firm's cash flow from operations? Submit Answer format: Number: Round to: 0 decimal places. unanswered not_submitted Attempts Remaining: Infinityarrow_forward
- Prior Year Current Year Accounts payable 3,153.00 5,915.00 Accounts receivable 6,935.00 9,046.00 Accruals 5,794.00 6,085.00 Additional paid in capital 19,655.00 13,876.00 Cash. ??? ??? Common Stock 2,850 2,850 COGS 22,169.00 18,794.00 Current portion long-term debt 500 500 Depreciation expense 1,016.00 1,037.00 Interest expense 1,276.00 1,138.00 Inventories 3,041.00 6,672.00 Long-term debt 16,904.00 22,546.00 Net fixed assets 75,987.00 73,861.00 Notes payable 4,002.00 6,534.00 Operating expenses (excl. depr.) 19,950 20,000 Retained earnings 35,536.00 34,724.00 Sales 46,360 45,799.00 Taxes 350 920 Category ww What is the firm's total change in cash from the prior year to the current year?arrow_forwardCASE ANALYSIS Case 1: Gardner Corporation For December 31, 2019, the balance sheet of the Gardner Corporation is as follows: Current Assets Liabilities Cash $ 15,000 Accounts payable $ 20,000 Accounts receivable 22,500 Notes payable 30,000 Inventory. 37,500 Bonds payable.. 75,000 Prepaid expenses 18,000 Fixed Assets Stockholders' Equity Plant and equipment (gross)....... $375,000 Common stock $112,500 Paid-in capital 37,500 Retained earnings. Less: Accumulated depreciation.. Net plant and assets.... Total assets... 75,000 118,000 300,000 Total liabilities and $393,000 stockholders' equity..... $393,000 Sales for the year 2020 were $330,000, with cost of goods sold being 60 percent of sales. Selling and administrative expense was $33,000. Depreciation expense was 10 percent of plant and equipment (gross) at the beginning of the year. Interest expense for the notes payable was 10 percent, while interest on the bonds payable was 12 percent. These were based on December 31, 2019, balances.…arrow_forward26  Fireside, Incorporated uses accrual basis accounting. Its balance sheets reported Accounts Receivable of $12,000 at the end of its first year and $18,000 at the end of its second year. Its income statement reported Sales Revenue of $120,000 in its second year. What would Fireside's revenues have been if it had used cash basis accounting?  Multiple Choice  $120,000  $114,000  $126,000  $12,000arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License