Compute the missing amounts in the following financial statements. You may assum

Question

Compute the missing amounts in the following financial statements. You may assume that accounts receivable relate only to credit sales and that accounts payable relate only to credit purchases of inventory. There were no sales of property and equipment during 2012 and any purchases of property and equipment were made using cash. Balance Sheet at 31-Dec-11 31-Dec-12 Income Statement for Year Ending Current assets Cash $18,000 ? 31-Dec-12 Marketable securities 2,000 5,000 Sales revenue 140,000 Accounts receivable 8,000 10,000 Cost of sales 87,000 Merchandise inventory 41,000 58,000 Gross profit 53,000 Prepaid advertising 13,000 16,000 Expenses: ? Total current assets 82,000 104,000 Wages ? Property, plant and equipment (PPE), cost* 175,000 ? Advertising 5,000 Accumulated depreciation -35,000 -63,000 Depreciation ? Land 15,000 ? Amortization 2,000 Intangible assets ? 7,000 Total expenses 24,000 Total assets $227,000 $282,000 Operating profit 29,000 Interest 3,000 Current liabilities ? ? Income (loss) before taxes 26,000 Accounts payable $18,000 ? Tax expense ? Wages payable 15,000 18,000 Net income 18,000 Interest payable ? 6,000 Dividends payable 2,000 4000 Taxes payable 5,000 1,000 Total current liabilities 48,000 50,000 Long-term debt $46,000 ? Shareholders’ equity ? ? Common stock 121,000 160,000 Retained earnings 22,000 32,000 Treasury stock ? -12,000 Total liabilities and shareholders’ equity $227,000 $282,000 Statement of Cash Flow for Year Ended 31-Dec-12 Cash flow from operating activities ? Cash collections from customers ? Cash payments for: Inventory -101,000 Wages -3,000 Taxes -12,000 Interest -5,000 Advertising -8,000 Net cash provided by operations 9,000 Cash flow from investing activities (Purchases) sale of property, plant and equipment -39,000 (Purchase) sale of marketable securities -3,000 (Purchase) sale of land ? Net cash provided by investing activities -49,000 Cash flow from financing activities Issuance (repayment) of long-term debt 6,000 Payment of dividend -6,000 Issuance (repurchase) of common stock 39,000 (Purchase) sale of treasury stock -2,000 Net cash provided by financing activities 37,000 Net cash flow ($3,000) Compute the missing amounts in the following financial statements. You may assume that accounts receivable relate only to credit sales and that accounts payable relate only to credit purchases of inventory. There were no sales of property and equipment during 2012 and any purchases of property and equipment were made using cash. Balance Sheet at 31-Dec-11 31-Dec-12 Income Statement for Year Ending Current assets Cash $18,000 ? 31-Dec-12 Marketable securities 2,000 5,000 Sales revenue 140,000 Accounts receivable 8,000 10,000 Cost of sales 87,000 Merchandise inventory 41,000 58,000 Gross profit 53,000 Prepaid advertising 13,000 16,000 Expenses: ? Total current assets 82,000 104,000 Wages ? Property, plant and equipment (PPE), cost* 175,000 ? Advertising 5,000 Accumulated depreciation -35,000 -63,000 Depreciation ? Land 15,000 ? Amortization 2,000 Intangible assets ? 7,000 Total expenses 24,000 Total assets $227,000 $282,000 Operating profit 29,000 Interest 3,000 Current liabilities ? ? Income (loss) before taxes 26,000 Accounts payable $18,000 ? Tax expense ? Wages payable 15,000 18,000 Net income 18,000 Interest payable ? 6,000 Dividends payable 2,000 4000 Taxes payable 5,000 1,000 Total current liabilities 48,000 50,000 Long-term debt $46,000 ? Shareholders’ equity ? ? Common stock 121,000 160,000 Retained earnings 22,000 32,000 Treasury stock ? -12,000 Total liabilities and shareholders’ equity $227,000 $282,000 Statement of Cash Flow for Year Ended 31-Dec-12 Cash flow from operating activities ? Cash collections from customers ? Cash payments for: Inventory -101,000 Wages -3,000 Taxes -12,000 Interest -5,000 Advertising -8,000 Net cash provided by operations 9,000 Cash flow from investing activities (Purchases) sale of property, plant and equipment -39,000 (Purchase) sale of marketable securities -3,000 (Purchase) sale of land ? Net cash provided by investing activities -49,000 Cash flow from financing activities Issuance (repayment) of long-term debt 6,000 Payment of dividend -6,000 Issuance (repurchase) of common stock 39,000 (Purchase) sale of treasury stock -2,000 Net cash provided by financing activities 37,000 Net cash flow ($3,000)

Explanation / Answer

1 Cash at 31 dec 12 = 104000 - 16000 - 58000 - 10000 - 5000 = 15000 2 Intangible Assets at 31 dec 11 = 227000 - 82000 - 175000 - (-35000) - 15000 = -10000 3 Account Payable at 21 dec 12 = 50000 - 1000 - 4000 - 6000 - 18000 = 21000 4 Interest Payable at 31 dec 11 = 48000 - 5000 - 2000 - 15000 - 18000 = 8000 5 Purchase of land = -49000 - (-39000 - 3000) = -7000 6 Land at 31 dec 12 = 15000 + 7000 = 22000 7 Property, plant and equipment at 31 dec 2012 = 281000 - 7000 - 22000 - (-63000) = 212000 8 Long term debt at 31 dec 12 = 282000 - 50000 - 160000 - 32000 - (-12000) = 52000 9 Treasury stock at 31 dec 2011 = 227000 - 48000 - 46000 - 121000 - 22000 = -10000 10 Cash collection from customers = 9000 - (-101000 - 3000 - 12000 - 5000 - 8000) = 138000 11 Tax Expenses = Inccome before tax - Net income = 26000 - 18000 = 8000 12 Wages in Income statement = ending wages payable - beginning wages payable + wages paid in cash = 18000 - 15000 + 3000 = 6000 13 Depreciation = 24000 - 6000 - 2000 - 5000 = 11000

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