Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Chapter 4, Problem 4.10BE
To determine
Todetermine: The ending balance in the
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Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31):
2018
2017
Sales
$
4,550,000
$
3,650,000
Cost of goods sold
2,890,000
2,030,000
Administrative expenses
830,000
705,000
Selling expenses
390,000
342,000
Interest revenue
153,000
143,000
Interest expense
206,000
206,000
Loss on sale of assets of discontinued component
62,000
—
On July 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2018, for $62,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows:
1/1/18-9/30/18
2017
Sales
$
430,000
$
530,000
Cost of goods sold
(305,000
)
(338,000
)
Administrative expenses
(53,000
)
(43,000
)
Selling…
The following information is available for Bramble Corporation for the year ended December 31, 2020: cost of goods sold $225,000, sales revenue $477,000, other revenues and gains $51,000, and operating expenses $73,000.Assuming a corporate tax rate of 25%, prepare an income statement for the company.
$
$
financial statement below represents the performance of Yovela & Co in 2023. Yovela and
Co Income statement for the year ended 31 December 2023 $ Sales revenue 187,000 Cost
of goods sold (105,000) Gross profit 82,000 Interest income 1, 050 Selling, General &
Administrative Exp. (49,300) Interest Expense (1,950) Profit before tax 31,800 Tax Exp.
(8,427) Profit after tax 23, 373 Statement of financial position as at 31 December 2023
ASSETS $ $ Non- Current Assets Delivery van 44, 500 Current Assets Inventories 26,000
Trade receivables 21, 600 Cash at bank 20,855 Prepaid expenses (325) 68,455 Total Assets
112,955 EQUITY AND LIABILITIES Current Liabilities Trade payables 18,000 Tax payable
2,350 20, 350 Non- Current Liabilities Non- current debt 35, 650 Total Liabilities 56, 000
Equity 56, 955 Total equity and liabilities 112, 955 Required: As an analyst, you are required
to prepare a condensed financial statement as part of your process of evaluating the
business of Yovela $ Co. Useful…
Chapter 4 Solutions
Intermediate Accounting
Ch. 4 - Prob. 4.1QCh. 4 - ShoeBuy uses reversing entries for events such as...Ch. 4 - What is equity? What are the three components of...Ch. 4 - Prob. 4.4QCh. 4 - Will all transactions have a dual effect on the...Ch. 4 - Prob. 4.6QCh. 4 - What is meant by the term normal balance? Provide...Ch. 4 - Why is the general journal referred to as the book...Ch. 4 - Are account balances found in the general ledger?...Ch. 4 - What is the purpose of an unadjusted trial...
Ch. 4 - Explain the difference between the accrual basis...Ch. 4 - Under the accrual basis of accounting when do...Ch. 4 - Why are adjusting journal entries made? When do...Ch. 4 - What is a deferred revenue? When will the full...Ch. 4 - What is the purpose of the adjusted trial...Ch. 4 - Which statements can be prepared from the adjusted...Ch. 4 - Prob. 4.17QCh. 4 - Jefferson, CPAs provides accounting services for a...Ch. 4 - Gates Accounting Services (GAS), a sole...Ch. 4 - Prob. 4.3MCCh. 4 - State University sold all of its basketball...Ch. 4 - Prob. 4.5MCCh. 4 - Sampson Manufacturing Company (SMC) has an empty...Ch. 4 - On July 15, Year 1, Southeastern University hired...Ch. 4 - Embree Corp. purchased a four-year insurance...Ch. 4 - The Cougars football team sells season tickets in...Ch. 4 - Prob. 4.10MCCh. 4 - Prob. 4.1BECh. 4 - Transaction Analysis. Florences Floral...Ch. 4 - Journal Entries. Using the information provided in...Ch. 4 - Transaction Analysis; Journal Entries. Cals...Ch. 4 - Transaction Analysis; Journal Entries. Using the...Ch. 4 - Journal Entries; T-accounts. Using the information...Ch. 4 - Retained Earnings. In its first year of...Ch. 4 - Retained Earnings. Using the information provided...Ch. 4 - Prob. 4.9BECh. 4 - Prob. 4.10BECh. 4 - Adjusting Journal Entries. Barnard and Associates...Ch. 4 - Prob. 4.12BECh. 4 - Prob. 4.13BECh. 4 - Prob. 4.14BECh. 4 - Prob. 4.15BECh. 4 - Closing Entries. Using the information provided in...Ch. 4 - Closing Entries. At year-end Nelsons Nursery, Inc...Ch. 4 - Closing Entries. Readers, Inc., an online...Ch. 4 - Adjusting Journal Entries. Barnard and Associates...Ch. 4 - Prob. 4.20BECh. 4 - Adjusting Journal Entries. Gerhard News collects...Ch. 4 - Prob. 4.22BECh. 4 - Prob. 4.23BECh. 4 - Prob. 4.24BECh. 4 - Transaction Analysis. The following transactions...Ch. 4 - Prob. 4.2ECh. 4 - Transaction Analysis; Journal Entries. Master Mind...Ch. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Posting to the General Ledger. Using the...Ch. 4 - Preparing Journal Entries in the General Journal....Ch. 4 - Preparing the T-accounts. Using the information...Ch. 4 - Transaction Analysis: Journal Entries and Posting...Ch. 4 - Transaction Analysis: Journal Entries and Posting...Ch. 4 - Prob. 4.11ECh. 4 - Adjusting Journal Entries: T-accounts. Fanatical...Ch. 4 - Prob. 4.13ECh. 4 - Prob. 4.14ECh. 4 - Prob. 4.15ECh. 4 - Prob. 4.16ECh. 4 - Prob. 4.17ECh. 4 - Adjusting Journal Entries; Adjusted Trial Balance....Ch. 4 - Preparing Financial Statements. Using the adjusted...Ch. 4 - Prob. 4.20ECh. 4 - Prob. 4.21ECh. 4 - Closing Entries. Diane s Dairy Sales Delivery...Ch. 4 - Prob. 4.23ECh. 4 - Prob. 4.24ECh. 4 - Transaction Analysis; Journal Entries; Adjusting...Ch. 4 - Transaction Analysis; Journal Entries; Adjusting...Ch. 4 - Prob. 4.3PCh. 4 - Prob. 4.4PCh. 4 - Prob. 4.5PCh. 4 - Journal Entries; Post to the General Ledger;...Ch. 4 - Preparing the Trial Balance; Adjusting Journal...Ch. 4 - Transaction Analysis; Journal Entries; Adjusting...Ch. 4 - Closing Process. Using the information in P4-6 and...Ch. 4 - Closing Process. Sherlock Locksmiths, Inc has the...Ch. 4 - Transaction Analysis; Journal Entries, Posting,...Ch. 4 - Transaction Analysis; Journal Entries, Posting,...
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- Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): 2021 2020 Sales revenue $ 5,350,000 $ 4,450,000 Cost of goods sold 3,050,000 2,190,000 Administrative expense 990,000 865,000 Selling expense 550,000 492,000 Interest revenue 169,000 159,000 Interest expense 238,000 238,000 Loss on sale of assets of discontinued component 124,000 — On July 1, 2021, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2021, for $124,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 1/1/2021–9/30/2021 2020 Sales revenue $ 590,000 $ 690,000 Cost of goods sold (385,000 ) (434,000 ) Administrative expense (69,000 ) (59,000…arrow_forwardDuring 2021, Blossom Inc. has the following account balances in Income Statement: Sales 1,630,245 Cost of Sales 646,788 Selling Expense 235,500 Administrative Expense 114,766 Other Expense 57,146 Income Tax Expense 200,400 Other Revenue 65,800 What will be the Net income?arrow_forwardMartinez Industries had the following operating results for 2021: Sales = $34,318; Cost of goods sold = $24,212; Depreciation expense = $5,997; Interest expense = $2,710; Dividends paid = $1,996. At the beginning of the year, net fixed assets were $19,940, current assets were $7,054, and current liabilities were $3,992. At the end of the year, net fixed assets were $24,502, current assets were $8,684, and current liabilities were $4,673. The tax rate was 22 percent. a. What is net income for 2021? b. What is the operating cash flow for 2021? ( c. What is the cash flow from assets for 2021? d-1. If no new debt was issued during the year, what is the cash flow to creditors? ( d-2. If no new debt was issued during the year, what is the cash flow to stockholders?arrow_forward
- BCD Company had sales Revenue of $500,000 for the year 2019. Its cost of goods sold was $240,000, and its operating expenses were $50,000, and administrative expenses $ 25,000. Interest revenue for the year is $5,000 of which $2000 is unearned and interest expense was $12,000. BCD’s income tax rate is 25%. Required: Prepare a classified multiple-step income statement for the year for BCD Company.arrow_forwardPrescott Football Manufacturing had the following operating results for 2019: sales = $30,074; cost of goods sold = $21,704; depreciation expense = $3,498; interest expense = $534; dividends paid = $841. At the beginning of the year, n fixed assets were $19,988, current assets were $3,205, and current liabilities were $3,554. At the end of the year, net fixed assets were $23,047, current assets were $4,425, and current liabilities were $3,045. The tax rate for 2019 was 24 percent. A. What is net income for 2019? B. What is the operating cash flow for 2019? C. What is the cash flow from assets for 2019? D. Assume no new debt was issued during the year. What is the cash flow to creditors for 2019? F. Assume no new debt was issued during the year. What is the cash flow toarrow_forwardMartinez Industries had the following operating results for 2021: Sales = $33,914; Cost of goods sold = $24,016; Depreciation expense = $5,957; Interest expense = $2,690; Dividends paid = $1,960. At the beginning of the year, net fixed assets were $19,900, current assets were $7,026, and current liabilities were $3,968. At the end of the year, net fixed assets were $24,466, current assets were $8,660, and current liabilities were $4,637. The tax rate for 2021 was 23 percent. What is net income for 2021? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) What is the operating cash flow for 2021? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) What is the cash flow from assets for 2021? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) d-1. If no new debt was issued during the…arrow_forward
- Čardinal Industries had the following operating results for 2018: Sales = $34,621; Cost of goods sold Dividends paid = $2,023. At the beginning of the year, net fixed assets were $19,970, current assets were $7,075, and current liabilities were $4,01O. At the end of the year, net fixed assets were $24,529, current assets were $8,702, and current liabilities were $4,700. The tax rate for 2018 was 25 percent. $24,359; Depreciation expense = $6,027; Interest expense $2,725; %3D a. What is net income for 2018? (Do not round intermediate calculations.) b. What is the operating cash flow for 2018? (Do not round intermediate calculations.) c. What is the cash flow from assets for 2018? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) d- If no new debt was issued during the year, what is the cash flow to creditors? (Do not 1. round intermediate calculations.) d- If no new debt was issued during the year, what is the cash flow to stockholders? (Do…arrow_forwardMartinez Industries had the following operating results for 2021: Sales = $33,308; Cost of goods sold = $23,722; Depreciation expense = $5,897; Interest expense = $2,660; Dividends paid = $1,906. At the beginning of the year, net fixed assets were $19,840, current assets were $6,984, and current liabilities were $3,932. At the end of the year, net fixed assets were $24,412, current assets were $8,624, and current liabilities were $4,583. The tax rate for 2021 was 22 percent. a. What is net income for 2021? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the operating cash flow for 2021? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. What is the cash flow from assets for 2021? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) d-1. If no new debt…arrow_forwardCardinal Industries had the following operating results for 2018: Sales = $34,318; Cost of goods sold = $24,212; Depreciation expense = $5,997; Interest expense = $2,710; Dividends paid = $1,996. At the beginning of the year, net fixed assets were $19,940, current assets were $7,054, and current liabilities were $3,992. At the end of the year, net fixed assets were $24,502, current assets were $8,684, and current liabilities were $4,673. The tax rate for 2018 was 22 percent. a. What is net income for 2018? (Do not round intermediate calculations.) b. What is the operating cash flow for 2018? (Do not round intermediate calculations.) c. What is the cash flow from assets for 2018? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) d-1. If no new debt was issued during the year, what is the cash flow to creditors? (Do not round intermediate calculations.) d-2. If no new debt was issued during the year, what is the cash flow…arrow_forward
- During 2020, Best Corporation had cash and credit sales of $36,420 and $18,560, respectively. The company also collected accounts receivable of $10,350 and incurred operating expenses of $39,600, 80% of which were paid during the year. In addition, Best prepaid $4,500 for an 18 month advertising campaign that began September 30. Best Company's accrual basis net income (loss) for the year ending December 31, 2020 was: Group of answer choices A. $8,535 B. $240 C. $14,630 D. $18,800arrow_forwardLaflamme Inc. had the following operating results for 2018: sales $30,660; cost of goods sold = $20.260, depreciation expense = $5,660: interest expense = $3.090; dividends paid = $1,950. At the beginning of the year, net fixed assets were $17,480, current assets were $5.960, and current liabilities were $3.575. At the end of the year, net fixed assets were $21,160, current assets were $7,180, and current liabilities were $4,100. The tax rate for 2018 was 30 %. a. What is net income for 2018? (Negative answers should be indicated by a minus sign. Omit $ sign in your response.) Net income b. What is the operating cash flow for 2018? (Negative answers should be indicated by a minus sign. Omit $ sign in your response.) Operating cash flow c. What is the cash flow from assets for 2018? (Negative answer should be indicated by a minus sign. Omit $ sign in your response.) Cash flow from assets d. If no new debt was issued during the year, what is the cash flow to creditors? What is the cash…arrow_forwardDuring 2021, Wahid Co. generated revenues of $95,000. The company's expenses were as follows: cost of goods sold of $47,000, operating expenses of $16,000 and a loss on the sale of equipment of $5,000.Wahid's gross profit is: O a. $48,000. O b. $95,000. O c. $27,000. O d. $32,000.arrow_forward
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