qw.125. Use the following information for the Problems below. (Algo) Skip to question [The following information applies to the questions displayed below.] Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 637,500 Cost of goods sold 296,000 Gross profit 341,500 Operating expenses (excluding depreciation) $ 143,400 Depreciation expense 31,750 175,150 Other gains (losses) Loss on sale of equipment (16,125) Income before taxes 150,225 Income taxes expense 39,650 Net income $ 110,575 FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 66,400 $ 84,500 Accounts receivable 82,380 61,625 Inventory 292,156 262,800 Prepaid expenses 1,320 2,115 Total current assets 442,256 411,040 Equipment 146,500 119,000 Accumulated depreciation—Equipment (42,125) (51,500) Total assets $ 546,631 $ 478,540 Liabilities and Equity Accounts payable $ 64,141 $ 131,175 Long-term notes payable 72,800 67,950 Total liabilities 136,941 199,125 Equity Common stock, $5 par value 179,250 161,250 Paid-in capital in excess of par, common stock 54,000 0 Retained earnings 176,440 118,165 Total liabilities and equity $ 546,631 $ 478,540 Additional Information on Current Year Transactions The loss on the cash sale of equipment was $16,125 (details in b). Sold equipment costing $79,875, with accumulated depreciation of $41,125, for $22,625 cash. Purchased equipment costing $107,375 by paying $52,000 cash and signing a long-term notes payable for the balance. Paid $50,525 cash to reduce the long-term notes payable. Issued 3,600 shares of common stock for $20 cash per share. Declared and paid cash dividends of $52,300. Problem 16-5AB (Algo) Direct: Statement of cash flows LO P5 Required: Prepare a complete statement of cash flows using the direct method. Note: Amounts to be deducted should be indicated with a minus sign. FORTEN COMPANY Statement of Cash Flows For Current Year Ended December 31 Cash flows from operating activities $0 Cash flows from investing activities 0 Cash flows from financing activities 0 Net increase (decrease) in cash $0 Cash balance at December 31, prior year Cash balance at December 31, current year $0
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
qw.125.
Use the following information for the Problems below. (Algo) Skip to question [The following information applies to the questions displayed below.] Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales $ 637,500 Cost of goods sold 296,000 Gross profit 341,500 Operating expenses (excluding
.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
