FIN 370 4-2A (Pro forma accounts receivable balance calculation) On March 31, 2003, the Sylvia Gift Shop

FIN 370 4-2A (Pro forma accounts receivable balance calculation) On March 31, 2003, the Sylvia Gift Shop

FIN 370 4-2A (Pro forma accounts receivable balance calculation)

 FIN 370 4-2A Sylvia Gift Shop

4-2A (Pro forma accounts receivable balance calculation) On March 31, 2003, the Sylvia Gift Shop

Axia College of University of Phoenix (UoP)                           

Financial Management: Principles and Applications by Keown

Chapter Study Questions

Resource: Chapter 4

4-2A (Pro forma accounts receivable balance calculation) On March 31, 2003, the Sylvia Gift Shop had outstanding accounts receivable of $20,000. Sylvia’s sales are roughly evenly split between credit and cash sales, with half the credit sales collected in the month after the sale and the remainder two months after the sale. Historical and projected sales for the gift shop are: MONTH SALES January $15,000 February 20,000 March $30,000 April (projected) 40,000 1. Under these circumstances, what should the balance in accounts receivable be at the end of April? 2. How much cash did Sylvia realize during April from sales and collections?                                                                                                 

SOLUTION PREVIEW

1. Under these circumstances, what should the balance in accounts receivable be at the end of April?

Percentage of cedit sales	0.5
Sales
February	20,000
March	30,000

 

SOLUTION

P9-5 On April 15, 2011, fire damaged the office and warehouse of Stanislaw Corporation.

P 9-5 (gross profit method) On April 15, 2011, fire damaged the office and warehouse of Stanislaw Corporation.

P 9-5 (gross profit method) Stanislaw Corporation.

The only accounting record saved was the general ledger, from which the trial balance below was prepared.

Trial Balance March 31, 2011

Cash 20000 Accts Recv 40000 Inventory 12/31/07 75000 Land 35000 Building and Equip 110000 Accumulated depreciation 41300 Other assets 3600 Accts Payable 23700 Other expense accruals 10200 Capital stock 100000 Retained earnings 52000 Sales 135000 Purchases 52000 Other expenses 26600 Total 362200 362200

The following data and information have been gathered.

1. The fiscal year of the corporation ends on Dec 31.

2. An examination of the April bank statement and canceled checks revealed that checks written during the period April 1-15 totaled $13,000: $5,700 paid to accounts payable as of March 31, $3400 for April merchandise shipments, and $3900 paid for other expenses. Deposits during the same period amounted to $12,950, which consisted of receipts on account from customers with the exception of a $950 refund from a vendor for merchandise returned in April.

3. Correspondence with suppliers revealed unrecorded obligations at April 15 of $15,600 for April merchandise shipments, including $2300 for shipments in transit (f.o.b. shipping point) on that date. 4. Customers acknowledged indebtedness of $46,000 at April 15, 2011. It was also estimated that customers owed another $8000 that will never be acknowledged or recovered. Of the acknowledged indebtedness, $600 will probably be uncollectible.

5. The companies insuring the inventory agreed that the corporation's fire-loss claim should be based on the assumption that the overall gross profit ratio for the past 2 years was in effect during the current year.

The corporation's audited financial statements disclosed this information: Year Ended Dec 31, 2010 Net sales 530000 Net purchases 280000 Beginning inventory 50000 Ending inventory 75000 Year Ended Dec 31, 2009 Net sales 390000 Net purchases 235000 Beginning inventory 66000 Ending inventory 50000

6. Inventory with a cost of $7000 was salvaged and sold for $3500. The balance of the inventory was a total loss.

Instructions:

Prepare a schedule computing the amount of inventory fire loss. The supporting schedule of the computation of the gross profit should be in good form.

SOLUTION PREVIEW

Stanislaw Corporation

COMPUTATION OF INVENTORY FIRE LOSS

April 15, 2005

Inventory, 1/1/05			$  75,000
Purchases, 1/1/ – 3/31/05			52,000
April merchandise shipments paid			3,400
Unrecorded purchases on account			10,600
Total			141,000

File name: P9-5-Stanislaw-Corporation.doc File type: application/msword Price: $5

FIN 370 5-4A (Present value) What is the present value of the following future amounts?

5-4A (Present value) What is the present value of the following future amounts?

$800 to be received 10 years from now discounted back to the present at 10 percent

$300 to be received 5 years from now discounted back to the present at 5 percent

$1,000 to be received 8 years from now discounted back to the present at 3 percent

$1,000 to be received 8 years from now discounted back to the present at 20 percent

SOLUTION

FIN 370 5-6A. Present value of an annuity (Present value of an annuity) What is the present value of the following annuities?

FIN 370 5-6A. Present value of an annuity (Present value of an annuity) What is the present value of the following annuities?

FIN 370 5-6A. (Present value of an annuity)

5-6A. (Present value of an annuity)

Axia College of University of Phoenix (UoP)

Financial Management: Principles and Applications by Keown

Chapter Study Questions

Resource: Chapter 5

5-6A. Present value of an annuity (Present value of an annuity) What is the present value of the following annuities?

a. $2,500 a year for 10 years discounted back to the present at 7 percent

b. $70 a year for 3 years discounted back to the present at 3 percent

c. $280 a year for 7 years discounted back to the present at 6 percent

d. $500 a year for 10 years discounted back to the present at 10 percent 

File name: FIN-370-5-6A.-Present-value-of-an-annuity.xls File type: application/vnd.ms-excel Price: $5

What is the accumulated sum of each of the following streams of payments?

What is the accumulated sum of each of the following streams of payments?

FIN 370 5-5A (Compound annuity)

5-5A (Compound annuity) What is the accumulated sum of each of the following streams of payments?

$100 a year for 5 years compounded annually at 10 percent

$35 a year for 7 years compounded annually at 7 percent

$25 a year for 3 years compounded annually at 2 percent                     

$500 a year for 10 years compounded annually at 5 percent

SOLUTION 

Wells Fargo & Company headquartered in San Francisco is one of the nations

Exercise 11-8 Wells Fargo & Company headquartered in San Francisco is one of the nations

E11-8 Wells Fargo & Company

Financial Accounting

Managerial Accounting: Weygandt, Kimmel, Kieso                                 

Exercise 11-8 Wells Fargo & Company headquartered in San Francisco is one of the nations largest financial institutions. It reported the following selected accounts (in millions) as of December 31, 2004

Retained earnings                                                                    $27143

Preferred Stock                                                                                    $    270

Common Stock--$1 2/3par value, authorized 6,000,000,000

Shares; issued 1,736,381,025                                                  $  2894

Treasury stock –41,789,388 shares                                         (2,247)

Additional paid in capital -- common stock                             9806

INSTRUCTIONS

Prepare the Stockholders’ equity section of the balance sheet for Wells Fargo as of December 31, 2004

                                                                                                                                     SOLUTION

The comparative balance sheets for Ramirez Company as of December 31 are presented below.

P12-11A The comparative balance sheets for Ramirez Company as of December 31 are presented below.

RAMIREZ COMPANY

Comparative Balance Sheets December 31

Assets                                                              2007                2006

Cash                                                                $ 71,000          $ 45,000

Accounts receivable                                        44,000             62,000

Inventory                                                        151,450           142,000

Prepaid expenses                                             15,280             21,000

Land                                                                105,000           130,000

Equipment                                                       228,000           155,000

Accumulated depreciation-equipment            (45,000)           (35,000)

Building                                                          200,000           200,000

Accumulated depreciation-building               (60,000)           (40,000)

Total                                                                $709,730         $680,000

Liabilities and Stockholders' Equity

Accounts payable                                            $ 47,730          $ 40,000

Bonds payable                                                260,000           300,000

Common stock, $1 par                                    200,000           160,000

Retained earnings                                           202,000           180,000

Total                                                                $709,730         $680,000

Additional information:

1. Operating expenses include depreciation expense of $42,000 and charges from prepaid expenses of $5,720.

2. Land was sold for cash at book value.

3. Cash dividends of $15,000 were paid.

4. Net income for 2007 was $37,000.

5. Equipment was purchased for $95,000 cash. In addition, equipment costing $22,000 with a book value of $10,000 was sold for $6,000 cash.

6. Bonds were converted at face value by issuing 40,000 shares of $1 par value common stock.

Cash from operations $105,000

Instructions               

Prepare a statement of cash flows for the year ended December 31, 2007, using the indirect method.

                                                                                                                            SOLUTION              

ACC 363 P11-7A On July 1, 2006, S. Strigel Chemical Company issued $5,000,000 face value, 10%, 10-

ACC 363 P11-7A On July 1, 2006, S. Strigel Chemical Company issued $5,000,000 face value, 10%, 10-

ACC 363 P11-7A S. Strigel Chemical Company

Axia College of University of Phoenix (UoP) Financial Accounting: Weygandt, Kieso, and Kimmel, 5th Edition Financial Accounting II

P11-7A On July 1, 2006, S. Strigel Chemical Company issued $5,000,000 face value, 10%, 10-year bonds at $5,679,533. This price resulted in an 8% effective-interest rate on the bonds. Strigel uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on each July 1 and January 1.

Instructions (Round all computations to the nearest dollar.)

(a) Prepare the journal entries to record the following transactions.

(1) The issuance of the bonds on July 1, 2006.

(2) The accrual of interest and the amortization of the premium on December 31, 2006.

(3) The payment of interest and the amortization of the premium on July 1, 2007, assuming
no accrual of interest on June 30.

(4) The accrual of interest and the amortization of the premium on December 31, 2007.

(b) Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2007, balance sheet.

(c) Provide the answers to the following questions in letter form.

(1) What amount of interest expense is reported for 2007?

(2) Would the bond interest expense reported in 2007 be the same as, greater than, or less than the amount that would be reported if the straight-line method of amortization were used?

(3) Determine the total cost of borrowing over the life of the bond.

(4) Would the total bond interest expense be greater than, the same as, or less than the total interest expense if the straight-line method of amortization were used?

 

File name: ACC-363-P11-7A-S.-Strigel-Chemical-Company2.doc File type: application/msword Price: $7

Problem P14-7A, Prepare a statement of cash flows—indirect method. Problem P14-8A, Prepare a statement of cash flows — Direct method.

ACC 363 P14-7A The financial statements of Ernest Banks Company appear below. indirect method.
ACC 363 P14-8A Data for Ernest Banks Company is presented in P14-7A. Further analysis reveals the following. Direct method.

Problem P14-7A, Prepare a statement of cash flows—indirect method.

Problem P14-8A, Prepare a statement of cash flows — Direct method.

ACC 363 P14-7A P14-8A Ernest Banks Company

Axia College of University of Phoenix (UoP)

Financial Accounting: Weygandt, Kieso, and Kimmel, 5th Edition

Financial Accounting II

Problem P14-7A, Prepare a statement of cash flows—indirect method.

P14-7A The financial statements of Ernest Banks Company appear below.

The financial statements of Ernest Banks Company appear below.

Ernest Banks Company

Comparative Balance Sheets

December 31

     Assets                                                                     2006               2005      

     Cash                                                                       $23,000           $13,000

     Accounts Receivable                                              24,000             33,000

     Merchandise inventory                                           20,000             27,000

     Prepaid expenses                                        20,000             13,000

     Land                                                                       40,000             40,000

     Property, plant and equipment                    200,000           225,000           

     Less: Accumulated Depreciation               (50,000)           (67,500)

          Total                                                      $277, 000        $283,500

     Liabilities and Stockholders' Equity

     Accounts Payable                                       $9,000             $18,500

     Accrued expenses payable                        9,500               7,500

     Interest payable                                          1,000               1,500

     Income taxes payable                                 3,000               2,000

     Bonds Payable                                            50,000             80,000

     Common stock                                           123,000           105,000

     Retained earnings                                       81,500             69,000

          Total                                                      $277,000        $283,500

Ernest Banks Company

Income Statement

For the Year Ended December 31, 2006

     Revenues

          Sales                                                      $600,000

          Gain on sale of plant assets                   2,500               $602,500

     Less: Expenses

          Cost of goods sold                                 500,000

          Operating expenses (excluding

            Depreciation)                                       60,000

          Depreciation Expense                                        7,500

          Interest Expense                                    5,000

          Income tax expense                                           9,000               581,500

     Net Income                                                 $21,000

Additional Information:

1.     Plant assets were sold at a sales price of $62,500.

2.     Additional equipment was purchased at a cost of $60,000.

3.     Dividends of $8,500 were paid.

4.     All sales and purchases were on account.

5.     Bonds were redeemed at face value.

6.     Additional shares of stock were issued for cash.

Instructions

Prepare a statement of cash flows for Ernest Banks Company for the year ended December 31, 2006, using the indirect method.

Hints:

(a) Cash receipts from customers $206,000

          Net cash provided by operating activities $28,000

          Investing activities provided $2,500

 

Problem P14-8A, Prepare a statement of cash flows — Direct method.

P14-8A Data for Ernest Banks Company is presented in P14-7A. Further analysis reveals the following.

1. Accounts payable relates to merchandise creditors.

2. All operating expenses, except depreciation expense, were paid in cash.

Instructions

Prepare a statement of cash flows for Ernest Banks Company for the year ended December 31, 2006, using the direct method.

Hints: Net cash provided by operating activities $28,000

     Investing activities provided $2,500

 

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