Kazaam company a merchandiser recently completed its

Assignment Help Accounting Basics

Reference no: EM13573427

Kazaam Company, a merchandiser, recently completed its calendar-year 2011 operations. For the year,all sales are credit sales, all credits to Accounts Receivable reflect cash receipts from customers,all purchases of inventory are on credit, all debits to Accounts Payable reflect cash payments for inventory, and Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheets and income statement follow.

KAZAAM COMPANY Comparative Balance Sheets December 31, 2011 and 2010
	2011		2010
Assets
Cash	$	49,200	$	73,500
Accounts receivable		65,890		60,000
Merchandise inventory		277,500		251,500
Prepaid expenses		1,500		1,500
Equipment		159,000		106,500
Accum. depreciation-Equipment		(42,125)		(52,000)

Total assets	$	510,965	$	441,000

Liabilities and Equity
Accounts payable	$	54,165	$	113,000
Short-term notes payable		9,000		7,000
Long-term notes payable		67,500		48,500
Common stock, $5 par value		162,750		150,500
Paid-in capital in excess of par, common stock		36,750		0
Retained earnings		180,800		122,000

Total liabilities and equity	$	510,965	$	441,000

KAZAAM COMPANY Income Statement For Year Ended December 31, 2011
Sales			$	582,000
Cost of goods sold				280,000

Gross profit				302,000
Operating expenses
Depreciation expense	$	20,000
Other expenses		133,600		153,600

Other gains (losses)
Loss on sale of equipment				5,750

Income before taxes				142,650
Income taxes expense				24,250

Net income			$	118,400

Additional Information on Year 2011 Transactions
a.	The loss on the cash sale of equipment was $5,750 (details in b).
b.	Sold equipment costing $47,250, with accumulated depreciation of $29,875, for $11,625 cash.
c.	Purchased equipment costing $99,750 by paying $25,000 cash and signing a long-term note payable for the balance.
d.	Borrowed $2,000 cash by signing a short-term note payable.
e.	Paid $55,750 cash to reduce the long-term notes payable.
f.	Issued 2,450 shares of common stock for $20 cash per share.
g.	Declared and paid cash dividends of $59,600.

Reference no: EM13573427

Questions Cloud

A company that uses a job order cost accounting system : 1. a company that uses a job order cost accounting system incurred 10000 of factory payroll during may. prepare the may

In the huron division cost of goods sold is 55810 variable : judy jean a recent graduate of rollings accounting program evaluated the operating performance of artie companys six

Reruns of older television shows and movies present moral : reruns of older television shows and movies present moral dilemmas that earlier generations faced. share with the

Bond l matures in15 years while bond s matures in 1 year : an investor has two bonds in his portfolio that both have a facevalue of 1000 and pay a 10 percent annual coupon. bond

Kazaam company a merchandiser recently completed its : kazaam company a merchandiser recently completed its calendar-year 2011 operations. for the yearall sales are credit

Which is the safer investment which offers the higher : you are considering the choice between investing 50000 in a conventional 1-year bank cd offering an interest rate of 5

Discuss the values implied by these sayings from other : discuss the values implied by these sayings from other cultures.a. even a sheet of paper has two sides.b. shrouds are

If the beginning inventory is understated by 1300 and : if the beginning inventory is understated by 1300 and ending inventory is understated by 700 what would be impact on

An 8 percent semi-annual coupon bond matures in 5 years the : an 8 percent semi-annual coupon bond matures in 5 years. the bond has a face value of 1000 and a current yield of 8.21

User Account

All Pages