1B Fal 2017 Homework: Chapter 16 Homework Score: 0.48 of 2 pts 4 of 5 (5 HW Scor

Question

1B Fal 2017 Homework: Chapter 16 Homework Score: 0.48 of 2 pts 4 of 5 (5 HW Score: 16-32A (similar to) Reserve Rare Coins (CRRC) was formed on Janusry 1, 2016. Additional data for the year follow (Click the icon to view the data.) Rare Coins Year Ended er 31, 2016 On January 1, 2016, CRRC issued no par common stock for $400,000. Early in January, CRRC made the following cash payments . For store fatures, $53,000 a. s 507,500 b. For merchandise inventory, $320,000 Cost of Goods Sold Salaries and Wages Expense Depreciation Expense s 260,000 96,000 10,600 3. For rent expense on a store building, $15,000 G. Later in the year, CRRC purchased merch inventory on account for $234,000. Before year-end, CRRC paid $134,000 of this account payable. d. During 2016, CRRC sold 2,900 units of inventory for $175 each Before year-end, the company collected 80% of this amount. Cost of goods sold for the year was $260,000, and ending merchandise inventory totaled $294,000. 18000 e. The store employs three people. The combined annual payroll is $96.000, of which f. At the end of the year, CRRC paid income tax of $18,000. There are no income g. Late in 2016, CFRC paid cash dividends of $43,000 399,600 Total Expenses CRRC still owes $7,000 at year-end S 107,900 For store fiotures, CRRC uses the straight-ine depreciation method, over five years, with zero residual value. h. parts

Explanation / Answer

1. Purpose of cash flow is to provide information about a company's gross receipts and gross payments for a specified period of time. It helps us in examining the changes in cash balance in a year and analyzing where cash came from and how it was spent during a given period.

2.

3. Balance sheet:

Calculations and explanations for Balance sheet:

1. Cash:

Amount Formula Revenue Sales revenue 507,500.00 2900*175 Expenses Cost of goods sold 260,000.00 provided Salaries 96,000.00 provided Rent expenses 15,000.00 provided Income taxes 18,000.00 provided Depreciation 10,600.00 53000/5 Total expenses 399,600.00 Net income 107,900.00

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