Questions 1
Exercise 3-4 Balance sheet preparation [LO3-2, 3-3]
The following is a December 31, 2013, post-closing trial balance for the Jackson Corporation.
Account Title
Debits
Credits
Cash
40,000
Accounts receivable
34,000
Inventories
75,000
Prepaid rent
16,000
Marketable securities (short term)
10,000
Machinery
145,000
Accumulated depreciationmachinery
11,000
Patent (net of amortization)
83,000
Accounts payable
8,000
Wages payable
4,000
Taxes payable
32,000
Bonds payable (due in 10 years)
200,000
Common stock
100,000
Retained earnings
48,000
Totals
403,000
403,000
Required:
Prepare a classified balance sheet for Jackson Corporation at December 31, 2013.
Questions 2
Exercise 3-12 Financial statement disclosures [LO3-4]
Parkman Sporting Goods is preparing its annual report for its 2013 fiscal year. The companys controller has asked for your help in determining how best to disclose information about the following items:
Required:
Indicate whether the above items should be disclosed (A) in the summary of significant accounting policies note, (B) in a separate disclosure note, or (C) on the face of the balance sheet.
1. A related-party transaction
2. Depreciation method
3. Allowance for uncollectible account
4. Composition of investments
5. Composition of long-term debt
6. Inventory costing method
7. Number of share of common stock authorized, issued, and outstanding
8. Employee benefit plans
Question 3
Exercise 4-3 Multiple-step continuous statement of comprehensive income [LO4-1, 4-5, 4-6, 4-7]
The trial balance for Lindor Corporation, a manufacturing company, for the year ended December 31, 2013, included the following income accounts:
Account Title
Debits
Credits
Sales revenue
2,300,000
Gain on litigation settlement (unusual and infrequent)
400,000
Cost of goods sold
1,400,000
Selling and administrative expenses
420,000
Interest expense
40,000
Unrealized holding gains on investment securities
80,000
The trial balance does not include the accrual for income taxes. Lindor’s income tax rate is 30%. One million shares of common stock were outstanding throughout 2013.
Required:
Prepare a single, continuous multiple-step statement of comprehensive income for 2013, including appropriate EPS disclosures. (Amount to be deducted should be indicated with a minus sign. Round EPS answers to 2 decimal places.)
Question 4
Exercise 4-18 Statement of cash flows; indirect method [LO4-9]
Presented below is the 2013 income statement and comparative balance sheet information for Tiger Enterprises.
TIGER ENTERPRISES
Income Statement
For the Year Ended December 31, 2013
($ in thousands)
Sales revenue
$
7,000
Operating expenses:
Cost of goods sold
$
3,360
Depreciation
240
Insurance
100
Administrative and other
1,800
Total operating expenses
5,500
Income before income taxes
1,500
Income tax expense
600
Net income
$
900
Balance Sheet Information ($ in thousands)
Dec. 31, 2013
Dec. 31, 2012
Assets:
Cash
$
300
$
200
Accounts receivable
750
830
Inventory
640
600
Prepaid insurance
50
20
Plant and equipment
2,100
1,800
Less: Accumulated depreciation
(840
)
(600
)
Total assets
$
3,000
$
2,850
Liabilities and Shareholders’ Equity:
Accounts payable
$
300
$
360
Payables for administrative and other expenses
300
400
Income taxes payable
200
150
Note payable (due 12/31/2014)
800
600
Common stock
900
800
Retained earnings
500
540
Total liabilities and shareholders’ equity
$
3,000
$
2,850
Required:
Prepare Tigers statement of cash flows, using the indirect method to present cash flows from operating activities. (Hint: You will have to calculate dividend payments.) (Enter your answers in thousands. Amounts to be deducted should be indicated with a minus sign.)