Accounting Questions

Sheet1

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Question 1
Excel Steel Company
Comparative Balance Sheet
12/31/22 12/31/21 Change
Cash 20,000.00 30,500.00
Accounts receivable 17,000.00 13,000.00
Inventory 25,000.00 20,000.00
Supplies 900.00 500.00
Prepaid insurance 800.00 2,000.00
Equipment, net of accumulated depreciation 36,000.00 40,000.00
     Total assets 99,700.00 106,000.00
Accounts payable 35,000.00 41,000.00
Salaries payable 13,000.00 16,000.00
Common stock, $10 par value 25,000.00 25,000.00
Additional paid-in capital 14,000.00 14,000.00
Retained earnings 12,700.00 10,000.00
     Total liabilities and stockholders’ equity 99,700.00 106,000.00
Excel Steel Company, Inc.
Income Statement
Fiscal Year Ending 12/31/2022
Sales 70,000.00
Cost of goods sold 30,000.00
Gross profit 40,000.00
Salary expense 10,000.00
Supplies expense 1,000.00
Insurance expense 20,000.00
Depreciation expense 4,000.00
Total Operating Expenses 35,000.00
     Net income 5,000.00
(A) Using the direct method, prepare the operating activities section of the statement of cash flows
for the year ended December 31, 2022 (recommend using the chart in item B below)
(B) Enter the appropriate amounts in the designated cells below. Indicate negative numbers using parenthesis such as (1,000).
( C ) Show your calculations for each value you present in the chart below
Cash flows from operating activities Amount
1. Cash received from customers
2. Cash paid to purchase inventory
3. Cash wages paid to employees
4. Cash paid for supplies
5. Cash paid for insurance
6. Net cash flow from operating activities
Question 2
ABC Tile Company has the following items on its year-end trial balance:
12/31/22
Net sales $500‚000
Common stock 100,000.00
Insurance expense 75,000.00
Wages 50,000.00
Cost of goods sold 100,000.00
Cash 40,000.00
Accounts payable 25,000.00
Interest payable 25,000.00
(a)What is the company’s gross profit?
(b) What is the company’s Net Income?
(c) Prepare an income statement in proper format with a three line heading.
Question 3
The adjusted trial balance for XYZ Clothing Company for the fiscal year ending 12/31/2022 includes the following account balances:
Common stock, $3 par 600,000.00
Additional paid-in capital 800,000.00
Treasury stock, at cost 50,000.00
Accumulated Other Comprehensive Net Loss 20,000.00
Retained earnings: Appropriated for
uninsured earthquake losses 150,000.00
Retained earnings: Unappropriated 200,000.00
(a) What amount should XYZ Clothing Company report as total equity in its December 31, 2022, balance sheet?
(b) On what financial statement(s) would the details for the Accumulated Other Comprehensive Net Loss appear?
NOTE: The above balances are all normal balances based on their account name
Question 4
Chicago Brick Company’s worksheet for the preparation of its current-year statement of cash flows included the following:
December 31 January 1
Accounts receivable $29,000 $23,000
Allowance for uncollectible accounts 1,000 800
Net Accounts Receivable 28,000 $22,200
Prepaid rent expense 8,200 12,400
Accounts payable 22,400 19,400
Chicago Brick Company reported net income of $150,000 for the current year. What amount should Lino include as net cash provided by operating activities in the statement of cash flows
(a)What amount should Lino include as net cash provided by operating activities in the statement of cash flows
(b) Would the total cash provided by operating activities in the statement of cash flows be different if prepared using the direct method rather than the indirect method?
Question 5
Center Products Company prepared its statement of cash flows at year-end using the direct method. The following amounts were used in the computation of cash flows from operating activities:
Beginning inventory 300,000.00
Ending inventory 150,000.00
Cost of good sold 1,300,000.00
Beginning accounts payable 400,000.00
Ending accounts payable 200,000.00
(a) What amount should Center Products Company report as cash paid to suppliers for inventory purchases?
(b) Present your calculations to assist others to understand the value you present as the cash paid to suppliers for inventory purchases.
Question 6
Liberty Plastics Company comparative balance sheets are presented below.
Liberty Plastics Company, Inc.
Comparative Balance Sheets
31-Dec
2022 2021
Cash $28,700 $23,000
Accounts receivable 22,000 24,000
Prepaid Insurance 6,000 3,000
Inventory 10,000 8,000
Land 28,000 45,000
Buildings 58,000 41,000
Equipment 135,000 105,000
Accumulated depreciation—buildings (17,400) (14,350)
Accumulated depreciation—equipment (91,500) (75,000)
Total $178,800 $159,650
Accounts payable $23,000 $46,650
Unearned revenue $3,000 $2,000
Common stock 40,000 30,000
Retained earnings 112,800 81,000
Total $178,800 $159,650
Additional information:
a. Land was sold during the year for $50,000.
No other changes occurred to the land account this year.
b. Equipment was sold for $60,000 cash during the year. It had a net book value of $42,000.
Original Cost was $84,000.
c. An addition was built to the building, creating new space. New equipment was purchased
d. Net income was $55,800. Dividends declared and paid were $24,000.
Liberty Plastics Company
Income Statement
For the year ending December 31
2022 2021
Sales 400,000 330,000
Cost of goods sold 260,000 225,000
Gross profit 140,000 105,000
All other expense 84,200 78,000
Net income 55,800 27,000
All sales were on account.
All other expenses were paid in cash without any effect on accounts payable
1. Complete the Statement of Cash Flows for Liberty Plastics Company using the indirect method.
2. Complete the Statement of Cash Flows for Liberty Plastics Company using the direct method.
Show your calculations based on information in the income statement and on the balance sheet
for partial credit
Question 7
(a) Define the conceptual framework with at least on reference to FASB and one reference to a textbook from our ACCT 310 6382 course.
(b) Describe on situation, where, as an accounting professional, you would consider the conceptual framework relative to a new accounting standard.
Question 8
(a) How do you know if a value on the statement of cash flows should be positive or negative?
(b) What financial statements are used to create the values for the statement of cash flows?
( c ) List the three sections for the statement of cash flows, in proper order, for the indirect method and the direct method.
(d) Describe the differences and similarities in the values and line items when considering the indirect method and the direct method for the statement of cash flows.
** A bulleted list may be helpful for essay questions, especially when you are listing components or concepts
Write in your own words. The items in Question 8 are ones you should be able to explain in conversation, from memory (okay to use course materials here as you write your answers)
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