P1-30 Compute the missing amounts in the following financial statements. *Hint:
ID: 2460175 • Letter: P
Question
P1-30 Compute the missing amounts in the following financial statements. *Hint: Property, plant and equipment (PPE), cost = Prior year balance of PPE, cost + Purchases of PPE - Sales of PPE. See Statement of Cash Flow below for Purchases of PPE in 2012. There were no sales of PPE in 2012. Balance Sheet at 31-Dec-11 31-Dec-12 Income Statement for Year Ending Current assets Cash 10,000 $25,000 31-Dec-12 Marketable securities 3,000 5,000 Sales revenue Accounts receivable 12,000 37,000 Cost of sales 123,000 Merchandise inventory 52,000 23,000 Gross profit 162,000 Prepaid advertising 15,000 18,000 Expenses: Total current assets 92,000 108,000 Wages 15,000 Property, plant and equipment (PPE), cost* 175,000 Advertising 18,000 Accumulated depreciation -35,000 -63,000 Depreciation Land 15,000 Amortization 4,000 Intangible assets 103,000 7,000 Total expenses 65,000 Total assets $258,000 $342,000 Operating profit 97,000 Interest Current liabilities Income (loss) before taxes 88,000 Accounts payable $12,000 $23,000 Tax expense 35,000 Wages payable 18,000 Net income 53,000 Interest payable 6,000 5,000 Dividends payable 3,000 Taxes payable 17,000 12,000 Total current liabilities 43,000 60,000 Long-term debt 86,000 Shareholders’ equity Common stock 150,000 172,000 Retained earnings 23,000 32,000 Treasury stock -10,000 Total liabilities and shareholders’ equity $258,000 $342,000 Statement of Cash Flow for Year Ended 31-Dec-12 Cash flow from operating activities Cash collections from customers $260,000 Cash payments for: Inventory -83,000 Wages -2,000 Taxes -40,000 Interest -10,000 Advertising Net cash provided by operations 104,000 Cash flow from investing activities (Purchases) sale of property, plant and equipment -111,000 (Purchase) sale of marketable securities (Purchase) sale of land 11,000 Net cash provided by investing activities -102,000 Cash flow from financing activities Issuance (repayment) of long-term debt 34,000 Payment of dividend -45,000 Issuance (repurchase) of common stock (Purchase) sale of treasury stock 2,000 Net cash provided by financing activities 13,000 Net cash flow P1-30 Compute the missing amounts in the following financial statements. *Hint: Property, plant and equipment (PPE), cost = Prior year balance of PPE, cost + Purchases of PPE - Sales of PPE. See Statement of Cash Flow below for Purchases of PPE in 2012. There were no sales of PPE in 2012. Balance Sheet at 31-Dec-11 31-Dec-12 Income Statement for Year Ending Current assets Cash 10,000 $25,000 31-Dec-12 Marketable securities 3,000 5,000 Sales revenue Accounts receivable 12,000 37,000 Cost of sales 123,000 Merchandise inventory 52,000 23,000 Gross profit 162,000 Prepaid advertising 15,000 18,000 Expenses: Total current assets 92,000 108,000 Wages 15,000 Property, plant and equipment (PPE), cost* 175,000 Advertising 18,000 Accumulated depreciation -35,000 -63,000 Depreciation Land 15,000 Amortization 4,000 Intangible assets 103,000 7,000 Total expenses 65,000 Total assets $258,000 $342,000 Operating profit 97,000 Interest Current liabilities Income (loss) before taxes 88,000 Accounts payable $12,000 $23,000 Tax expense 35,000 Wages payable 18,000 Net income 53,000 Interest payable 6,000 5,000 Dividends payable 3,000 Taxes payable 17,000 12,000 Total current liabilities 43,000 60,000 Long-term debt 86,000 Shareholders’ equity Common stock 150,000 172,000 Retained earnings 23,000 32,000 Treasury stock -10,000 Total liabilities and shareholders’ equity $258,000 $342,000 Statement of Cash Flow for Year Ended 31-Dec-12 Cash flow from operating activities Cash collections from customers $260,000 Cash payments for: Inventory -83,000 Wages -2,000 Taxes -40,000 Interest -10,000 Advertising Net cash provided by operations 104,000 Cash flow from investing activities (Purchases) sale of property, plant and equipment -111,000 (Purchase) sale of marketable securities (Purchase) sale of land 11,000 Net cash provided by investing activities -102,000 Cash flow from financing activities Issuance (repayment) of long-term debt 34,000 Payment of dividend -45,000 Issuance (repurchase) of common stock (Purchase) sale of treasury stock 2,000 Net cash provided by financing activities 13,000 Net cash flow P1-30 Compute the missing amounts in the following financial statements. *Hint: Property, plant and equipment (PPE), cost = Prior year balance of PPE, cost + Purchases of PPE - Sales of PPE. See Statement of Cash Flow below for Purchases of PPE in 2012. There were no sales of PPE in 2012. Balance Sheet at 31-Dec-11 31-Dec-12 Income Statement for Year Ending Current assets Cash 10,000 $25,000 31-Dec-12 Marketable securities 3,000 5,000 Sales revenue Accounts receivable 12,000 37,000 Cost of sales 123,000 Merchandise inventory 52,000 23,000 Gross profit 162,000 Prepaid advertising 15,000 18,000 Expenses: Total current assets 92,000 108,000 Wages 15,000 Property, plant and equipment (PPE), cost* 175,000 Advertising 18,000 Accumulated depreciation -35,000 -63,000 Depreciation Land 15,000 Amortization 4,000 Intangible assets 103,000 7,000 Total expenses 65,000 Total assets $258,000 $342,000 Operating profit 97,000 Interest Current liabilities Income (loss) before taxes 88,000 Accounts payable $12,000 $23,000 Tax expense 35,000 Wages payable 18,000 Net income 53,000 Interest payable 6,000 5,000 Dividends payable 3,000 Taxes payable 17,000 12,000 Total current liabilities 43,000 60,000 Long-term debt 86,000 Shareholders’ equity Common stock 150,000 172,000 Retained earnings 23,000 32,000 Treasury stock -10,000 Total liabilities and shareholders’ equity $258,000 $342,000 Statement of Cash Flow for Year Ended 31-Dec-12 Cash flow from operating activities Cash collections from customers $260,000 Cash payments for: Inventory -83,000 Wages -2,000 Taxes -40,000 Interest -10,000 Advertising Net cash provided by operations 104,000 Cash flow from investing activities (Purchases) sale of property, plant and equipment -111,000 (Purchase) sale of marketable securities (Purchase) sale of land 11,000 Net cash provided by investing activities -102,000 Cash flow from financing activities Issuance (repayment) of long-term debt 34,000 Payment of dividend -45,000 Issuance (repurchase) of common stock (Purchase) sale of treasury stock 2,000 Net cash provided by financing activities 13,000 Net cash flowExplanation / Answer
1.
PPE cost as on 31-Dec-2012 = PPE as on 31-Dec-2011 + Purchase of PPE – Sale of PPE = $175,000 + $111,000 - $0 = $286,000
2.
Land as on 31-Dec-2012 = Land as on 31-Dec-2011 + Purchase of land – Sale of land = $15,000 + $0 - $11,000 = $4,000
3.
Wages payable as on 31-Dec-2012 = Wages payable as on 31-Dec-2011 + Wages for year 2012 – Wages paid
$18,000 = Wages payable as on 31-Dec-2011 + $15,000 - $2,000
Wages payable as on 31-Dec-2011 = $18,000 - $15,000 +$2,000 = $5,000
4.
Dividend payable as on 31-Dec-2012 = Total current liabilities – (Accounts payable + Interest payable + Wages payable + Taxes payable) = $60,000 – ($23,000 + $18,000 + $5,000 + $12,000)= $2,000
5.
Long term debt as on 31-Dec-2012 = Long term debt as on 31-Dec-2011 + Issuance of long term debt
$86,000 = Long term debt as on 31-Dec-2011 + $34,000
Long term debt as on 31-Dec-2011 = $86,000 - $34,000 = $52,000
6.
Treasury stock as on 31-Dec-2012 = Treasury stock as on 31-Dec-2011 + Purchase of treasury stock = -$10,000 + $2,000 = -$8,000
7.
Sale revenue = Cost of sales + Gross profit = $123,000 + $162,000 = $285,000
8.
Depreciation expense = Accumulated depreciation as on 31-Dec-2012 - Accumulated depreciation as on 31-Dec-2011 = $63,000 - $35,000 = $28,000
Interest = Operating profit – Income before taxes = $97,000 - $88,000 = $9,000
9.
Cash payments for Advertising = Prepaid advertising as on 31-Dec-2012 + Advertising expenses – Prepaid advertising as on 31-Dec -2011 = $18,000 + $18,000 - $15,000 = $21,000
10.
Purchase of marketable securities = Marketable securities as on 31-Dec-2012 - Marketable securities as on 31-Dec-2011 = $5,000 - $3,000 = $2,000
11.
Issue of common stock = Common stock as on 31-Dec-2012 – Common stock as on 31-Dec-2011 = $172,000 - $150,000 = $22,000
12.
Net cash flow = Net cash provided by operations + Net cash provided by investing activities + Net cash provided by financing activities = $104,000 - $102,000 + $13,000 = $15,000
Balance Sheet at
31-Dec-11
31-Dec-12
Current assets
Cash
$10,000
$25,000
Marketable securities
$3,000
$5,000
Accounts receivable
$12,000
$37,000
Merchandise inventory
$52,000
$23,000
Prepaid advertising
$15,000
$18,000
Total current assets
$92,000
$1,08,000
Property, plant and equipment (PPE), cost*
$175,000
$286,000
Accumulated depreciation
-$35,000
-$63,000
Land
$15,000
$4,000
Intangible assets
$11,000
$7,000
Total assets
$258,000
$342,000
Current liabilities
Accounts payable
$12,000
$23,000
Wages payable
$5,000
$18,000
Interest payable
$6,000
$5,000
Dividends payable
$3,000
$2,000
Taxes payable
$17,000
$12,000
Total current liabilities
$43,000
$60,000
Long-term debt
$52,000
$86,000
Shareholders’ equity
Common stock
$150,000
$172,000
Retained earnings
$23,000
$32,000
Treasury stock
-$10,000
-$8,000
Total liabilities and shareholders’ equity
$258,000
$342,000
Income Statement for Year Ending
31-Dec-12
Sales revenue
$285,000
Cost of sales
$123,000
Gross profit
$162,000
Expenses:
Wages
$15,000
Advertising
$18,000
Depreciation
$28,000
Amortization
$4,000
Total expenses
$65,000
Operating profit
$97,000
Interest
$9,000
Income (loss) before taxes
$88,000
Tax expense
$35,000
Net income
$53,000
Statement of Cash Flow for Year Ended
31-Dec-12
Cash flow from operating activities
Cash collections from customers
$260,000
Cash payments for:
Inventory
-$83,000
Wages
-$2,000
Taxes
-$40,000
Interest
-$10,000
Advertising
-$21,000
Net cash provided by operations
$104,000
Cash flow from investing activities
(Purchases) sale of property, plant and equipment
-$111,000
(Purchase) sale of marketable securities
-$2,000
(Purchase) sale of land
$11,000
Net cash provided by investing activities
-$102,000
Cash flow from financing activities
Issuance (repayment) of long-term debt
$34,000
Payment of dividend
-$45,000
Issuance (repurchase) of common stock
$22,000
(Purchase) sale of treasury stock
$2,000
Net cash provided by financing activities
$13,000
Net cash flow
$15,000
Balance Sheet at
31-Dec-11
31-Dec-12
Current assets
Cash
$10,000
$25,000
Marketable securities
$3,000
$5,000
Accounts receivable
$12,000
$37,000
Merchandise inventory
$52,000
$23,000
Prepaid advertising
$15,000
$18,000
Total current assets
$92,000
$1,08,000
Property, plant and equipment (PPE), cost*
$175,000
$286,000
Accumulated depreciation
-$35,000
-$63,000
Land
$15,000
$4,000
Intangible assets
$11,000
$7,000
Total assets
$258,000
$342,000
Current liabilities
Accounts payable
$12,000
$23,000
Wages payable
$5,000
$18,000
Interest payable
$6,000
$5,000
Dividends payable
$3,000
$2,000
Taxes payable
$17,000
$12,000
Total current liabilities
$43,000
$60,000
Long-term debt
$52,000
$86,000
Shareholders’ equity
Common stock
$150,000
$172,000
Retained earnings
$23,000
$32,000
Treasury stock
-$10,000
-$8,000
Total liabilities and shareholders’ equity
$258,000
$342,000
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