ACC 421 Week 4 Wiley Plus Assignment – Exercises:The income statement of Rodriquez Company…

ACC 421 Week 4 Wiley Plus Assignment – ExercisesProblem 1The income statement of Rodriquez Company is shown below.RODRIQUEZ COMPANYINCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2012Sales$6,894,600Cost of goods soldBeginning inventory$1,893,870Purchases4,375,530Goods available for sale6,269,400Ending inventory1,608,650Cost of goods sold4,660,750Gross profit2,233,850Operating expensesSelling expenses440,640Administrative expenses703,8401,144,480Net income$1,089,370Additional information:1.Accounts receivable decreased $312,690 during the year.2.Prepaid expenses increased $178,550 during the year.3.Accounts payable to suppliers of merchandise decreased $281,970 during the year.4.Accrued expenses payable decreased $124,510 during the year.5.Administrative expenses include depreciation expense of $55,760.Prepare the operating activities section of the statement of cash flows using the direct method.Problem 2Presented below are two independent situations.Situation A:Chenowith Co. reports revenues of $200,680 and operating expenses of $110,380 in its first year of operations, 2012. Accounts receivable and accounts payable at year-end were $79,260 and $40,870, respectively. Assume that the accounts payable related to operating expenses. Ignore income taxes.Using the direct method, compute net cash provided (used) by operating activities.(If an amount reduces the account balance then enter with negative sign.)Net cash providedusedby operating activities$ Situation B:The income statement for Edgebrook Company shows cost of goods sold $307,650 and operating expenses (exclusive of depreciation) $231,760. The comparative balance sheet for the year shows that inventory increased $21,380, prepaid expenses decreased $7,680, accounts payable (related to merchandise) decreased $15,450, and accrued expenses payable increased $13,950.Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.(a)Cash payments to suppliers$ (b)Cash payments for operating expenses$ Problem 3Condensed financial data of Fairchild Company for 2012 and 2011 are presented below.FAIRCHILD COMPANYCOMPARATIVE BALANCE SHEETAS OF DECEMBER 31, 2012 AND 201120122011Cash$1,801$1,091Receivables1,7571,301Inventory1,5941,900Plant assets1,8971,707Accumulated depreciation(1,205)(1,170)Long-term investments (held-to-maturity)1,2991,462$7,143$6,291Accounts payable$1,207$796Accrued liabilities203245Bonds payable1,4181,631Common stock1,8931,706Retained earnings2,4221,913$7,143$6,291FAIRCHILD COMPANYINCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2012Sales$6,851Cost of goods sold4,691Gross margin2,160Selling and administrative expenses930Income from operations1,230Other revenues and gainsGain on sale of investments82Income before tax1,312Income tax expense531Net income$781Additional information:During the year, $78 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $272.Prepare a statement of cash flows using the indirect method.(If an amount reduces the account balance then enter with negative sign.)Problem 4Condensed financial data of Fairchild Company for 2012 and 2011 are presented below.FAIRCHILD COMPANYCOMPARATIVE BALANCE SHEETAS OF DECEMBER 31, 2012 AND 201120122011Cash$1,803$1,095Receivables1,7551,291Inventory1,5811,910Plant assets1,8931,708Accumulated depreciation(1,194)(1,163)Long-term investments (held-to-maturity)1,2991,475$7,137$6,316Accounts payable$1,205$789Accrued liabilities213235Bonds payable1,4111,649Common stock1,8981,692Retained earnings2,4101,951$7,137$6,316FAIRCHILD COMPANYINCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2012Sales$6,828Cost of goods sold4,694Gross margin2,134Selling and administrative expenses935Income from operations1,199Other revenues and gainsGain on sale of investments80Income before tax1,279Income tax expense547Net income$732Additional information:During the year, $78 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $273.Prepare a statement of cash flows using the direct method.(If an amount reduces the account balance then enter with negative sign.)