Reference no: EM133099829

Question 1 - The following items and amounts were taken from Lotte Inc.'s 2022 financial statements.

Cash $84,700 Accounts receivable $88,419

Retained earnings (1/1/22) 123,192 Sales revenue 584,951

Cost of goods sold 438,192 Notes payable 6,499

Salaries and wages expense 115,131 Accounts payable 49,384

Prepaid insurance 7,818 Service revenue 4,806

Inventory 64,618 Interest expense 1,882

Common stock ?

Required -

(a) Prepare a balance sheet as of December 31, 2022. As part of this, calculate the balance of common stock. (Hint: Your balance sheet must balance)

(b) What percentage of assets were acquired by owners' investment?

Question 2 - This information is for Kidmann Corporation for the year ended December 31, 2022.

Cash collected from customers $60,000

Cash received from issuing common stock 40,000

Cash paid for new building 70,000

Cash dividends paid 6,000

Cash payments to suppliers 15,000

Cash received from sale of equipment 10,000

Cash paid for operating expenses 10,000

Cash paid to retire debt 14,000

Cash balance 1/1/22 13,000

Required -

(a) Prepare the 2022 statement of cash flows for Kidmann Corporation.

(b) Which activity is most important to the long-run success of any company? Why?

Question 3 - Mendez Company had three major business transactions during 2022.

(a) Security investments with a market value of $10,000 were reported in the financial statements at their original cost $9,300.

(b) The death of the company's Chief Executive Officer was reported as a $1,000,000 loss in the company's income statement.

(c) The annual report did not include any notes to the financial statements.

Required - In each situation, identify the assumption or principle that has been violated, if any, and discuss what the company should have done.