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Indicate in which part of the statement of cash flows each item would appear: operating activities, investing activities, or financing activities.
(a)
Cash
received from customers
.
(b)
Cash paid to stockholders (dividends).
(c)
Cash received from issuing new common stock.
(d)
Cash paid to suppliers.
(e)
Cash paid to purchase a new office building.
At the beginning of the year, Goren Company had total assets of $849,
800
and total liabilities of $596,700. (Treat each item independently.)
(a) If total assets increased $144,300 during the year and total liabilities decreased $73,400, what is the amount of stockholders’ equity at the end of the year?
|
Stockholders’ equity |
$ |
(b) During the year, total liabilities increased $109,800 and stockholders’ equity decreased $65,600. What is the amount of total assets at the end of the year?
|
Total assets |
(c) If total assets decreased $85,400 and stockholders’ equity increased $112,900 during the year, what is the amount of total liabilities at the end of the year?
|
Total liabilities |
| Cash |
Supplies |
Equipment |
| (a) |
Suppose the following data are derived from the 2014 financial statements of Southwest Airlines. (All dollars are in millions.) Southwest has a December 31 year-end.
|
Cash balance, January 1, 2014 |
$1,424 |
|
Cash paid for repayment of debt |
126 |
|
Cash received from issuance of common stock |
114 |
|
Cash received from issuance of long-term debt |
475 |
| Cash received from customers |
9,603 |
|
Cash paid for property and equipment |
1,571 |
|
Cash paid for dividends |
13 |
|
Cash paid for repurchase of common stock |
1,005 |
|
Cash paid for goods and services |
7,121 |
(a)
After analyzing the data, prepare a statement of cash flows for Southwest Airlines for the year ended December 31, 2014.
(List negative amounts either with a negative sign preceding the number e.g. –
15,000
or in parenthesis e.g. (15,000). Enter amounts in millions, e.g. 45 million.)
|
SOUTHWEST AIRLINES |
|
The summaries of data from the balance sheet, income statement, and retained earnings statement for two corporations, Colaw Corporation and Hunter Enterprises, are presented below for 2014. Colaw Corporation Hunter Enterprises Beginning of year Total assets $105,680 $141,070 Total liabilities 60,160 $ (d) Total stockholders’ equity $ (a) 69,520 End of year Total assets $ (b) 185,840 Total liabilities 128,510 56,640 Total stockholders’ equity 52,010 $ (e) Changes during year in retained earnings Dividends $ (c) 5,970 Total revenues 215,200 $ (f) Total expenses 165,000 84,570 |
|
On June 1, Hightower Service Co. was started with an initial investment in the company of $22,380 cash. Here are the assets, liabilities, and common stock of the company at June 30, and the revenues and expenses for the month of June, its first month of operations: Cash $ 4,941 Notes payable $12,682 Accounts receivable 4,471 Accounts payable 971 Service revenue 7,841 Supplies expense 1,062 Supplies 2,338 Maintenance and repairs expense 662 Advertising expense 400 Utilities expense 238 Equipment 26,341 Salaries and wages expense 1,741 Common stock 22,380 In June, the company issued no additional stock but paid dividends of $1,680. |
|
(a1) Prepare an income statement for the month of June. HIGHTOWER SERVICE CO. $ $ $ |
|
These items are taken from the financial statements of Tresh Corporation for 2014. Retained earnings (beginning of year) $31,000 Utilities expense 2,000 Equipment 66,000 Accounts payable 18,300 Cash 10,100 Salaries and wages payable |
3,000 |
1,800 |
|
Prepare an income statement for the year ended December 31, 2014. TRESH CORPORATION $ $ $ Show List of Accounts Link to Text |
|
Prepare a retained earnings statement for the year ended December 31, 2014. TRESH CORPORATION $ : : $ Show List of Accounts Link to Text |
|
Prepare a classified balance sheet as of December 31, 2014. TRESH CORPORATION Assets $ $ : $ Liabilities and Stockholders’ Equity $ $ $ |
|
The Sequel Theater Inc. was recently formed. It began operations in March 2014. The Sequel is unique in that it will show only triple features of sequential theme movies. On March 1, the ledger of The Sequel showed Cash $16,000; Land $38,000; Buildings (concession stand, projection room, ticket booth, and screen) $22,000; Equipment $16,000; Accounts Payable $12,000; and Common Stock $80,000. During the month of March, the following events and transactions occurred. Mar. 2 Rented the three Star Wars movies (Star Wars®, The Empire Strikes Back, and The Return of the Jedi) to be shown for the first three weeks of March. The film rental was $10,000; $2,000 was paid in cash and $8,000 will be paid on March 10. 3 Ordered the first three Star Trek movies to be shown the last 10 days of March. It will cost $500 per night. 9 Received $9,900 cash from admissions. 10 Paid balance due on Star Wars movies’ rental and $2,900 on March 1 accounts payable. 11 The Sequel Theater contracted with J. Russo to operate the concession stand. Russo agrees to pay The Sequel 15% of gross receipts, payable monthly, for the rental of the concession stand. 12 Paid advertising expenses $500. 20 Received $8,300 cash from customers for admissions. 20 Received the Star Trek movies and paid rental fee of $5,000. 31 Paid salaries of $3,800. 31 Received statement from J. Russo showing gross receipts from concessions of $10,000 and the balance due to The Sequel of $1,500 ($10,000 × .15) for March. Russo paid half the balance due and will remit the remainder on April 5. 31 Received $20,000 cash from customers for admissions. |
|
Using T-accounts, enter the beginning balances to the ledger. Cash | Land | Buildings | Accounts Payable | Common Stock |
|
Journalize the March transactions. The Sequel records admission revenue as service revenue, concession revenue as sales revenue, and film rental expense as rent expense. Date Account Titles and Explanation |
Debit |
Credit |
|
Post the March journal entries to the ledger. Cash 3/1 Bal. 16,000 Accounts Receivable Land 3/1 Bal. 38,000 Buildings 3/1 Bal. 22,000 Equipment 3/1 Bal. 16,000 Accounts Payable 3/1 Bal. 12,000 Common Stock 3/1 Bal. 80,000 Service Revenue Sales Revenue |
Advertising Expense |
Salaries and Wages Expense |
|
Prepare a trial balance on March 31, 2014. SEQUEL THEATER INC. Debit Credit $ $ $ $ |
The Solo Hotel opened for business on May 1, 2014. Here is its trial balance before adjustment on May 3
1.
|
SOLO HOTEL |
|
|
$ 2,500 |
|
|
2,600 |
|
|
Prepaid Insurance |
|
| 15,000 | |
|
70,000 |
|
|
16,800 |
|
|
$ 4,700 |
|
|
Unearned Rent Revenue |
3,300 |
|
Mortgage Payable |
36,000 |
|
60,000 |
|
| Rent Revenue |
9,000 |
|
Utilities Expense |
800 |
| 500 | |
|
$113,000 |
Other data:
| 1. |
Insurance expires at the rate of $450 per month. |
|
2. |
A count of supplies shows $1,050 of unused supplies on May 31. |
|
3. |
Annual depreciation is $3,600 on the building and $3,000 on equipment. |
| 4. |
The mortgage interest rate is 6%. (The mortgage was taken out on May 1.) |
| 5. |
Unearned rent of $2,500 has been earned. |
|
6. |
Salaries of $900 are accrued and unpaid at May 31. |
(e) Identify which accounts should be closed on May 31.
|
The Solo Hotel opened for business on May 1, 2014. Here is its trial balance before adjustment on May 31. SOLO HOTEL Debit Credit Cash $ 2,500 Supplies 2,600 Prepaid Insurance 1,800 Land 15,000 Buildings 70,000 Equipment 16,800 Accounts Payable $ 4,700 Unearned Rent Revenue 3,300 Mortgage Payable 36,000 Common Stock 60,000 Rent Revenue 9,000 Salaries and Wages Expense 3,000 Utilities Expense 800 Advertising Expense 500 $113,000 $113,000 Other data: 1. Insurance expires at the rate of $450 per month. 2. A count of supplies shows $1,050 of unused supplies on May 31. 3. (a) Annual depreciation is $3,600 on the building. (b) Annual depreciation is $3,000 on equipment. 4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.) 5. Unearned rent of $2,500 has been earned. 6. Salaries of $900 are accrued and unpaid at May 31. |
|
Journalize the adjusting entries on May 31. No. Account Titles and Explanation Debit Credit 1. 2. 3 (a). 3 (b). 4. 5. 6. Show List of Accounts Show Solution Link to Text |
|
Prepare a ledger using T-accounts. Enter the trial balance amounts and post the adjusting entries. Cash Prepaid Insurance Supplies Land Building Accumulated Depreciation-Building Equipment Accumulated Depreciation-Equipment Accounts Payable Unearned Rent Revenue Salaries and Wages Payable Interest Payable Mortgage Payable Common Stock Rent Revenue Salaries and Wages Expense Utilities Expense Advertising Expense Interest Expense Insurance Expense Supplies Expense Depreciation Expense Show List of Accounts Link to Text |
|
Prepare an adjusted trial balance on May 31. SOLO HOTEL Debit Credit $ $ $ $ Show List of Accounts Link to Text |
|
Prepare an income statement for the month of May. SOLO HOTEL $ $ $ Show List of Accounts Link to Text |
|
Prepare a retained earnings statement for the month of May. SOLO HOTEL $ : $ Show List of Accounts Link to Text |
|
Prepare a classified balance sheet at May 31. SOLO HOTEL Assets $ $ $ : : $ Liabilities and Stockholders’ Equity $ $ $ |
