Explore BrainMass

Explore BrainMass

    Accounting: Financial Statement preparation

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    C1 ♦ FINANCIAL STATEMENT PREPARATION Exotic Adventures, a chain of stores servicing the ecotourism industry, has provided you with the following list of accounts and balances for the year ended June 30, 2012. All amounts shown are in thousands of dollars. You have been asked by the companyʼs chief financial officer (CFO) to use a spreadsheet to prepare financial statements for Exotic Adventures, including an income statement, a statement of retained earnings, a classified balance sheet, and (if required by your instructor) a statement of cash flows. The CFO canʼt remember the accounts receivable balance. She asks you to figure it out when you prepare the balance sheet. The financial information presented here is accumulated in a file named FINANCIAL on the website for this book at cengagebrain.com. You are encouraged to use this file for preparing your statements and to use the information in this file as a Data Section for your answer. Place the statements in the space below the data. The financial statements should be shown in thousands of dollars just as in the Data Section. Exotic Adventures is a privately held company, so earnings per share information is not required. Years
    Ended June 30

    Additional information required for the statement of cash flows:

    - Exotic Adventures sold a large amount of obsolete and worn out fixtures for $128.8. The fixtures originally cost $248.0 and had been depreciated down to a net book value of $20.0
    - Additional common stock, 24,000 shares, was issued for $76,000 in July. The par value of the stock is $2 per share.
    - Write off of goodwill and amortization of copyrights are included in other operating expenses.
    - No bonds were retired during the year. No additional notes payable were issued during the year.
    - Short term investments of $220.0 were made during the year. Exotic Adventure also sold $8.2 short term investments at no gain or loss.
    Check figures: Total assets, $3,385.2

    To test your model, suppose the auditors made the following three adjustments to the June 20, 2012 balances: sales were reduced by $100,000 to 9,073.2, inventories were increased by adjustments to your model. Does your balance sheet still balance? Check figure: Total assets, $3,445.2

    © BrainMass Inc. brainmass.com June 4, 2020, 5:19 am ad1c9bdddf
    https://brainmass.com/business/consolidated-financial-statements/accounting-financial-statement-preparation-616184

    Attachments

    Solution Summary

    The problem set deals with preparing the income statement, balance sheet, statement of retained earnings and statement of cash flows from provided information.

    $2.19

    ADVERTISEMENT