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    Preparing Balance Sheet, Income Statement, Cash Flow

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    2-25
    Balance Sheet Preparation
    From the following data, prepare a classified balance sheet for Taylorsville Construction Company at December 31, 2009.

    Accounts payable . . . . . . . . . . . . . . . . . . . . . . $ 74,300
    Accounts receivable . . . . . . . . . . . . . . . . . . . . . 113,500
    Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . 512,000
    Owners' equity, 1/1/09 . . . . . . . . . . . . . . . . . . 314,300
    Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,600
    Distributions to owners during 2009 . . . . . . . . 48,100
    Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,250
    Land . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 90,000
    Mortgage payable . . . . . . . . . . . . . . . . . . . . . . 423,400
    Net income for 2009 . . . . . . . . . . . . . . . . . . . . 109,450
    Owners' equity, 12/31/09 . . . . . . . . . . . . . . . . ?

    2/27
    Income Statement Preparation
    The following selected information is taken from the records of Pickard and Associates.
    Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . $ 143,000
    Accounts receivable . . . . . . . . . . . . . . . . . . . . . . 95,000
    Advertising expense . . . . . . . . . . . . . . . . . . . . . . 14,500
    Cash . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 63,000
    Supplies expense . . . . . . . . . . . . . . . . . . . . . . . . 31,500
    Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000
    Utilities expense . . . . . . . . . . . . . . . . . . . . . . . . . 2,500
    Income taxes (30% of income before taxes) . . . . ?
    Miscellaneous expense . . . . . . . . . . . . . . . . . . . . 5,100
    Owners' equity . . . . . . . . . . . . . . . . . . . . . . . . . . 215,000
    Salaries expense . . . . . . . . . . . . . . . . . . . . . . . . 78,000
    Fees (revenues) . . . . . . . . . . . . . . . . . . . . . . . . . 476,000

    1. Prepare an income statement for the year ended December 31, 2009. Assume that 11,000 shares of stock are outstanding.

    2/32
    Cash Flow Computations
    From the following 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

    2/29
    Retained Earnings Computations
    During 2009, Edgemont Corporation had revenues of $230,000 and expenses, including income taxes, of $190,000. On December 31, 2008, 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 2009. No additional stock was issued. Compute the retained earnings on December 31, 2008, and 2009.

    2/33
    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 payments for wages and salaries
    c. Cash proceeds from sale 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

    Please see the attached file.

    2-25
    Balance Sheet Preparation
    From the following data, prepare a classified balance sheet for Taylorsville Construction
    Company at December 31, 2009.

    Accounts payable . . . . . . . . . . . . . . . . . . . . . . $ 74,300
    Accounts receivable . . . . . . . . . . . . . . . . . . . . . 113,500
    Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . 512,000
    Owners' equity, 1/1/09 . . . . . . . . . . . . . . . . . . 314,300
    Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,600
    Distributions to owners during 2009 . . . . . . . . 48,100
    Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,250
    Land . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 90,000
    Mortgage payable . . . . . . . . . . . . . . . . . . . . . . 423,400
    Net income for 2009 . . . . . . . . . . . . . . . . . . . . 109,450
    Owners' equity, 12/31/09 . . . . . . . . . . . . . . . . ?

    The balance sheet is below :
    Taylorsville Construction
    Balance Sheet
    As on December 31, 2009
    Assets
    Current Assets
    Cash 153,600
    Accounts Receivable 113,500
    Supplies 4,250
    Total Current Assets 271,350
    Land 90,000
    Buildings 512,000
    Total Assets 873,350
    Liabilities and Owners Equity
    Current Liabilities
    Accounts Payable 74,300
    Total Current Liabilities 74,300
    Mortgages Payable 423,400
    Total Liabilities 497,700
    Owners Equity 375,650
    Total Liabilities and Owners Equity 873,350

    Owners Equity is
    Opening Balance 1/1/09 314,300
    Add: Net Income 109,450
    Less: Distribution to owners (48,100)
    Closing Balance 12/31/09 375,650

    2/27
    Income Statement Preparation
    The following selected information is taken from the records of Pickard and Associates.
    Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . $ 143,000
    Accounts receivable . . . . . . . . . . . . . . . . . . . . . . 95,000
    Advertising expense . . . . . . . . . . . . . . . . . . . . . . 14,500
    Cash . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 63,000
    Supplies expense . . . . . . . . . . . . . . . . . . . . . . . . 31,500
    Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000
    Utilities expense . . . . . . ...

    Solution Summary

    The solution shows how to prepare a classified balance sheet, an income statement, a statement of cash flows and classification of various transactions as investing, financing or operating activity

    $2.19

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