Reference no: EM132337025
Accounting Assignment Problems -
Problem 1 - The 2017 comparative income statement and balance sheet of Flowell Design Ltd. follow:
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Flowell Design Ltd. Income Statement For the Year Ended June 30, 2017
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Revenues:
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Sales revenue
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$275,000
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Interest revenue
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13,600
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Total revenues
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270,600
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Expenses:
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Cost of goods sold
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$76,600
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Salaries expense
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27,800
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Amortization expense
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4,000
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Other operating expenses
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10,500
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Interest expense
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16,600
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Income tax expense
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27,800
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Total expenses
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163,300
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Net income
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$107,300
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Flowell Design Ltd. Balance Sheet June 30, 2017 and 2016
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2017
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2016
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Current assets
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Cash and cash equivalents
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$7,200
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$6,300
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Accounts receivable
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31,600
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26,900
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Interest receivable
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1,900
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700
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Inventories
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33,600
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57,200
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Prepaid expenses
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2,500
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1,900
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Plant and equipment, net
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66,500
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49,400
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Land
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103,000
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54,000
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Total assets
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$246,300
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$196,400
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Current liabilities
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Accounts payable
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$31,400
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$28,800
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Interest payable
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4,400
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4,900
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Salaries payable
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3,100
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6,600
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Other accrued liabilities
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13,700
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16,000
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Income tax payable
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8,900
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7,700
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Long-term liabilities
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Notes payable
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75,000
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95,000
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Shareholders' equity
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Common shares
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68,300
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34,700
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Retained earnings
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41,500
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2,700
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Total liabilities and shareholders' equity
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$246,300
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$196,400
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Flowell Design Ltd. had no non-cash financing and investing transactions during 2017. During the year, there were no sales of land or plant and equipment, and no issuances of notes payable.
Required -
1. Prepare the 2017 cash flow statement, formatting operating activities by the direct method.
2. Evaluate the 2017 cash flow for this company.
Problem 2 - Use the Flowell Design Ltd. Data from problem 1.
Required -
1. Prepare the 2017 cash flow statement by the indirect method. If your instructor also assigned problem 1, prepare only the operating activities section of the statement.
2. Evaluate the 2017 cash flow for this company.
Note - For requirement 1, do only the statement heading and the operating activities section.
Problem 3 - Main Street Antiques Ltd.'s comparative balance sheet at December 31, 2017, and its 2017 income statement are as follows:
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Main Street Antiques Ltd. Balance Sheet December 31, 2017 and 2016
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2017
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2016
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Current assets
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Cash
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$188,000
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$43,000
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Accounts receivable
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370,000
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241,500
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Interest receivable
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14,500
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18,000
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Inventories
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343,000
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301,000
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Prepaid expenses
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18,500
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14,000
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Long-term investment
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50,500
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26,000
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Plant and equipment, net
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422,500
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368,000
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Land
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212,000
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480,000
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$1,619,000
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$1,491,500
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Current liabilities
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Notes payable, short-term
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$67,000
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$90,500
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Accounts payable
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234,500
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201,500
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Income tax payable
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69,000
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72,500
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Accrued liabilities
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41,000
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48,500
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Interest payable
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18,500
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14,500
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Salaries payable
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4,500
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13,000
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Long-term note payable
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237,000
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$470,500
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Common shares
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319,500
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256,000
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Retained earnings
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628,000
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324,500
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$1,619,000
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$1,491,500
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Main Street Antiques Ltd. Income Statement For the year Ended December 31, 2017
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Net sales
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$1,327,000
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Cost of goods sold
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402,000
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Gross margin
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925,000
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Operating expenses:
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Salaries expense
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$194,000
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Amortization expense
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27,000
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Other expenses
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210,000
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431,000
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Operating income
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494,000
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Other revenues and expenses:
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Revenues and gains:
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Interest revenue
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53,000
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Expenses and losses:
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Interest expense
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(30,500)
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Loss on sale of land
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(33,500)
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(64,000)
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Income before income taxes
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483,000
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Income tax expense
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49,500
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Net income
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$433,500
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Other information for the year ended December 31, 2017:
a. Acquired equipment by issuing a long term note payable, $76,500, and paying $5,000 cash.
b. Purchased a long-term investment for cash.
c. Received cash for issuance of common shares, $40,000.
d. Only cash dividends were issued during the year.
e. Paid short-term note payable by issuing common shares.
Required -
1. Prepare the cash flow statement of Main Street Antiques Ltd. for the year ended December 31, 2017, using the direct method to report operating activities. Also prepare a note to the financial statements providing a summary of non-cash investing and financing activities. All current accounts, except short-term notes payable, result from operating transactions.
2. Prepare a supplementary schedule showing cash flows from operations by the indirect method.
Attachment:- Assignment Template.rar