The following balance sheet was prepared by the bookkeeper for Purple Company as of December 31, 2011

2. (TCO D) The following balance sheet was prepared by the bookkeeper for Purple Company as of December 31, 2011

Purple Company
Balance Sheet
as of December 31, 2011
Cash $ 80,000 Accounts payable $ 75,000
Accounts receivable (net) 52,200 Long-term liabilities 100,000
Inventories 57,000 Stockholders' equity 218,500
Investments 76,300
Equipment (net) 96,000
Patents 32,000
$393,500 $393,500

The following additional information is provided:
(1) Cash includes the cash surrender value of a life insurance policy $12,000, and a bank overdraft of $2,500 has been deducted.
(2) The net accounts receivable balance includes:
(a) accounts receivable debit balances $60,000;
(b) accounts receivable 0;
(c) allowance for doubtful accounts $3,800.
(3) Inventories do not include goods costing $3,000 shipped out on consignment. Receivables of $3,000 were recorded on these goods.
(4) Investments include investments in common stock, trading $13,000 and available-for-sale $48,300, and franchises $15,000.
(5) Equipment costing $5,000 with accumulated depreciation $4,000 is no longer used and is held for sale. Accumulated depreciation on the other equipment is $40,000.
(6) An unrecorded liability was not recorded on the balance sheet of $2000. Instructions

Prepare a balance sheet in good form (stockholders' equity details can be omitted.)

Click here for the solution: The following balance sheet was prepared by the bookkeeper for Purple Company as of December 31, 2011

The comparative balance sheet of Flack Inc for December 31, 2013 and 2012 is shown as follows

PR 16-1A The comparative balance sheet of Flack Inc for December 31, 2013 and 2012 is shown as follows:

Assets:
Dec 31, 2013 Dec 2012
Cash $234,660 $219,720
Accounts receivables 85,440 78,360
Inventories 240,660 231,420
Investments 0 90,000
Land 123,000 0
Equipment 264,420 207,420
Accumulated Depreciation-Equipment (62,400) (55,500)
885,780 771,420

Liabilities and Stockholders’ Equity
Accounts payable (merchandise creditor) 159,180 151,860
Accrued expenses payable (operations expenses) 15,840 19,740
Dividends payable 9,000 7,200
Common stock $1 par 48,000 36,000
Paid in capital excess of par-common stock 180,000 105,000
Retained earnings 473,760 451,620
885,780 771,420

The following additional information was taken from the records:
a. The investments were sold for $105,000 cash.
b. Equipment and land were acquired for cash.
c. There was no disposal of equipment during the year.
d. Common stock was issued for cash.
e. There was a $58,140 credit to retained earnings for net income.
f. There was a $36,000 debit to retained earnings for cash dividends declared.

Instructions
Prepare a statement of cash flows using the indirect method of presenting cash flows from operating activities


Click here for the solution: The comparative balance sheet of Flack Inc for December 31, 2013 and 2012 is shown as follows

The standard cost sheet calls for 80 pounds of zinc per batch of 70 faucets

P 12–11: Zinc Faucets

The standard cost sheet calls for 80 pounds of zinc per batch of 70 faucets. Zinc has a standard price of $5.10 per pound. One thousand pounds of zinc are purchased for $5,530. Ten batches of the faucets are produced, and 840 pounds of zinc are used. There was no beginning zinc inventory. All variances are calculated as soon as possible.

Required:
Prepare a table that decomposes the total purchase price of the zinc ($5,530) into its various components as calculated by the standard cost system.

Click here for the solution: The standard cost sheet calls for 80 pounds of zinc per batch of 70 faucets