Only $35.99/year

Financial Accounting Set 1

Terms in this set (16)

a.)
GROVE COMPANY
Income Statement
For the Year Ended December 31, 2014

Sales revenue $50,500
Cost of goods sold 27,000
________
Gross profit 23,500
Operating expenses
Depreciation expense $4,800
Salaries and wages expense 5,200 10,000
________
Income from operations 13,500
Other expenses and losses
Interest expense 2,500
________
Net income $ 11,000



GROVE COMPANY
Balance Sheet
December 31, 2014

Assets
_______
Current assets
Cash....................................................... $24,000
Accounts receivable.............................. 8,000
Supplies................................................... 4,500
_______
Total current asset......................... $36,500
Property, plant, and equipment
Equipment.............................................. 44,000
Less: Accum. depreciation-equipment 4,800 39,200
_______
Intangible assets
Patents..................................................... 7,500
_______
Total assets..................................... $83,200
======

Liabilities and SHE
_____________________
Current liabilities
Accounts payable................................... $18,500
Long-term liabilities
Bonds payable........................................ 18,000
_______
Total liabilities................................ $36,500
Stockholders' equity
Common stock.................................. $25,000
Retained earnings............................ $21,700* 46,700
_________ _______
Total liabilities and SHE........... $83,200
======

*Retained earnings = $21,700
($16,000 + $11,000 - $5,300).

b.) 1. Current ratio: $36,500÷$18,500=1.97:1
2. Working capital $36,500 - $18,500 = $18,000
DREW CORPORATION
Income Statement
For the Year Ended December 31, 2014
___________________________________________________________
Revenues
Service revenue ... $78,000
Expense
Salaries and wages expense $47,000
Depreciation expense ...... 3,300
Insurance expense .......... 2,200
Utilities expense .............. 2,000
Maintenance and repairs expense 1,800

Total expenses 56,300
Net income $21,700


DREW CORPORATION
Retained Earnings Statement
For the Year Ended December 31, 2014
___________________________________________________________
Retained earnings, January 1, 2013 $33,000
Add: Net income 21,700
Less: Dividends 14,000
Retained earnings, December 31, 2014 $40,700


DREW CORPORATION
Balance Sheet
December 31, 2014
___________________________________________________________
Assets
Current assets
Cash ................................................... $15,900
Accounts receivable ......................... 14,200
Prepaid insurance ........................... 3,500
----------
Total current assets $33,600
Property, plant, and equipment
Equipment ............................................ 56,000
Less: Accum. deprec.-equipment 17,600 38,400
----------- ----------
Total assets $72,000
======

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable ................................ $15,300
Salaries and wages payable ................... 3,000
-----------
Total current liabilities $18,300
Stockholders' equity
Common stock ...................................... 13,000
Retained earnings ................................. 40,700
----------
Total stockholders' equity 53,700
----------
Total liabilities and stockholders' equity $72,000
======