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    Accounting Problems

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    Balance Sheet Preparation
    From the following data, prepare a classified balance sheet for Simon Company at December 31, 2006.

    Spreadsheet

    Accounts payable $62,500
    Accounts receivable 123,000
    Buildings 418,500
    Owners' equity, 1/1/06 210,000
    Cash 179,750
    Distributions to owners during 2006 21,750
    Supplies 3,750
    Land 130,000
    Mortgage payable 479,500
    Net income for 2006 124,750
    Owners' equity, 12/31/06 ?????

    Income Statement Preparation

    The following selected information is taken from the records of Beckstrom Corporation.

    Accounts payable $35,000
    Accounts receivable 65,000
    Advertising expense 15,000
    Cash 19,500
    Supplies expense 46,000
    Rent expense 10,000
    Utilities expense 3,000
    Income taxes (30% of income before taxes) ????
    Misc. expense 4,400
    Owners' equity 140,000
    Salaries expense 61,000
    Feels (revenues) 384,000

    1. Prepare an income statement for the year ended December 31, 2006. (Assume that 7,500 shares of stock are outstanding.)

    Cash Flow Computations

    From the follwing selected data, compute:
    1. Net cash flow provided (used) by operating activities.
    2. Net cash flow provided (used) by investing activities.
    3. Net cash flow provided (used by financing activities.
    4. Net increase (decrease) in cash during the year.
    5. The cash balance at the end of the year.

    Cash receipts from:
    Customers $270,000
    Investments by owners 54,000
    Sale of building 90,000
    Proceeds from bank loan 60,000
    Cash payments for:
    Wages $82,000
    Utilities 3,000
    Advertising 4,000
    Rent 36,000
    Taxes 67,000
    Dividends 20,000
    Repayment of principal on loan 40,000
    Purchase of land 106,000
    Cash balance at beginning of year $386,000

    Retained Earnings Computations

    During 2006, Edgemont Corporation had revenues of $230,000 and expenses, including income taxes, of $190,000. On December 31, 2005, Edgemont had assets of $350,000, liabilities of $80,000, and capital stock of $210,000. Edgemont paid a cash dividend of $25,000 in 2006. No additional stock was issued. Compute the retained earnings on December 31, 2005, and 2006.

    Cash Flow Classifications

    For each of the following items, indicate whether it would be classified and reported under the operating activities (OA), investing activities (IA), or financing activities (FA) section of a statement of cash flows:

    a. Cash receipts from selling merchandise
    b. Cash payment for wages and salaries
    c. Cash proceeds from sold of stock
    d. Cash purchase of equipment
    e. Cash dividends paid
    f. Cash received from bank loan
    g. Cash payments for inventory
    h. Cash receipts from services rendered
    i. Cash payments for taxes
    j. Cash proceeds from sale of property no longer needed as expansion site.

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    Solution Preview

    Balance Sheet Preparation
    From the following data, prepare a classified balance sheet for Simon Company at December 31, 2006.

    Spreadsheet

    Accounts payable $62,500
    Accounts receivable 123,000
    Buildings 418,500
    Owners' equity, 1/1/06 210,000
    Cash 179,750
    Distributions to owners during 2006 21,750
    Supplies 3,750
    Land 130,000
    Mortgage payable 479,500
    Net income for 2006 124,750
    Owners' equity, 12/31/06 ?????

    Simon Company
    Statement of Retained Earnings
    For the year ended December 31, 2006

    Owners' equity, 1/1/06 210,000
    Add: Net income for 2006 124,750
    Less: Distributions to owners during 2006 21,750
    Owners' equity, 12/31/06 313,000

    Simon Company
    Balance Sheet
    December 31, 2006

    Current Assets
    Cash 179,750
    Accounts receivable 123,000
    Supplies 3,750
    Total Current Assets 306,500

    Property and Equipment
    Buildings 418,500
    Land 130,000
    Total Property and Equipment 548,500
    Total Assets 855,000

    Current Liabilities
    Accounts payable 62,500
    Total Current Liabilities 62,500
    Long-term Liabilities
    Mortgage payable 479,500
    Total Long-term Liabilities 479,500
    Total Liabilities 542,000

    Owners' equity, 12/31/06 313,000
    Total Liabilities and Owners' equity 855,000

    Income Statement Preparation

    The following selected information is taken from the records of Beckstrom Corporation.

    Accounts payable $35,000
    Accounts ...

    Solution Summary

    This solution is comprised of a detailed answer for balance sheet, income statement, cash flows statement, and retained earnings statement preparations.

    $2.19