Problem 5-26 Accounting VitalSource Bookshelf File Edit View Book Window Help Gr
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Problem 5-26
Accounting VitalSource Bookshelf File Edit View Book Window Help Groovy Green(+ Library Back Forward Make Highlight Make Note Current HighlighterZoom In Zoom Out Zoom to Fit Hand Tool Start Reading Search this book Q Accounting for Receivables and Inventory Cost Flow 215 Contents Highlights Accounting for Receivables and Inventory Cost Flow 199 Co un tin 9 a. Organize the transaction data in accounts under an accounting equation. b. Prepare the income statement, statement of changes in stockholders" equity, balance sheet, and statement of cash flows for Sage Inc. for 2018. What is the net realizable value of the accounts receivable at December 31,2018? c. Accounting for notes receivable and uncollectible accounts using the percent of sales allowance method Problem 5-26 LO 5-1, 5-4 apply to Hooper Co. for 2018, its first year of operations: The following 1. Issued $60,000 of common stock for cash. 2. Provided $90,000 of services on account. 3. Collected $78,000 cash from accounts receivable. 4. Loaned $20,000 to Mosby Co. on November 30, 2018. The note had a one-year term to maturity Not... 10 Ho.. 14 Ack...16 An... 18 and a 6 percent interest rate. 5. Paid $26,000 of salaries expense for the year. 6. Paid a $2,000 dividend to the stockholders. 7. Recorded the accrued interest on December 31, 2018 (see item 4). 8. Estimated that 1 percent of service revenue will be uncollectible. Required a. Show the effects of these transactions in a horizontal statements model like the one shown as Acc... 108 Inte... 146 follows. Assets Equity Rev.-Exp.= Net Inc. Cash Flows Acc... 222 Acc... 262 Even ash+ Accts. Rec. -Allow. for Doubtfull Accts. + Notes Rec. + Int. Rec. = Conn. Stk. + Ret. Earn. Pro... Fin... 342 An... 380 ? Cos 422 Cos... 456 Rel... 486 b. Prepare the income statement, balance sheet, and statement of cash flows for 2018. Problem 5-27 Multistep income statement and balance sheet LO 5-1, 5-2, 5-4 Required Use the following information to prepare a multistep income statement and a classified balance sheet for Chun Equipment Co. for 2018. (Hint: Some of the items will not appear on either statement, and ending retained earnings must be calculated.) CHECK FIGURES Total Current Assets: $264,900 Total Current Liablities: $106,400 DIa 28 ChaptersExplanation / Answer
Answer
ASSETS
Equity
Income Statement
Event
Cash+
Accounts receivables - Allowances for DA
Notes Receivables+
Int Rec =
Common Stock+
Retained Earnings
Rev -
Expenses
Net Income
Cash Flows
1
60000
60000
FA
2
90000
90000
90000
90000
OA
3
78000
-78000
0
OA
4
-20000
20000
0
FA
5
-26000
-26000
26000
-26000
OA
6
-2000
-2000
0
FA
7
100
100
100
100
FA
8
-900
-900
900
-900
OA
TOTAL
90000
11100
20000
100
60000
61200
90100
26900
63200
Revenues:
Service revenue
90000
Interest revenue
100
Total Revenue
$90100
Expenses:
Salaries expense
26000
Bad Debts expense
900
Total expenses
$26900
Net Income
$63200
Retained earning, beg balance
$0
Add: Net Income
$63200
Less: Dividends
$2000
Retained earnings, ending balance
$61200
ASSETS
Current Assets:
Cash
90000
Accounts receivables, net
11100
Notes receivables
20000
Interest receivables
100
$121200
Total ASSETS
$121200
LIABILITIES & STOCKHOLDERS' EQUITY
Stockholders Equity:
Common Stock
60000
Retained Earnings
61200
Total Stockholders' Equity
$121200
Total LIABILITIES & STOCKHOLDERS" EQUITY
$121200
A. Cash Flow from Operating Activity
Net Income
63200
Less: Increase in Accounts receivables
11100
Less: Increase in Notes receivables
20000
Less: Increase in Interest receivables
100
Cash Flow from operating Activities
$32000
B. Cash Flow from Investing Activities
$0
C. Cash Flow from Financing Activities
Common Stock issued
60000
Dividends
-2000
Cash flow from Financing Activities
$58000
Net Increase (Decrease in Cash)
$90000
Add: Beginning Cash balance
$0
Ending Cash Balance
$90000
ASSETS
Equity
Income Statement
Event
Cash+
Accounts receivables - Allowances for DA
Notes Receivables+
Int Rec =
Common Stock+
Retained Earnings
Rev -
Expenses
Net Income
Cash Flows
1
60000
60000
FA
2
90000
90000
90000
90000
OA
3
78000
-78000
0
OA
4
-20000
20000
0
FA
5
-26000
-26000
26000
-26000
OA
6
-2000
-2000
0
FA
7
100
100
100
100
FA
8
-900
-900
900
-900
OA
TOTAL
90000
11100
20000
100
60000
61200
90100
26900
63200
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