Question :
111. Spirit Company, a merchandiser, recently completed the 2013 calendar year. : 1256414
111. Spirit Company, a merchandiser, recently completed the 2013 calendar year. 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, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s balance sheet and income statement follow:
SPIRIT COMPANYComparative Balance SheetDecember 31, 2013 and 2012
2013
2012
Assets
Cash
$ 49,200
$ 73,500
Accounts receivable
65,830
51,000
Merchandise inventory
276,000
252,500
Prepaid expenses
1,000
1,600
Equipment
159,000
106,500
Accum. depreciation—Equipment
(31,000)
(40,000)
Total assets
$520,030
$445,100
Liabilities and Equity
Accounts payable
$ 58,555
$ 112,000
Short-term notes payable
9,000
7,000
Long-term notes payable
65,000
48,500
Common stock, $5 par value
162,750
150,750
Paid-in capital in excess of par, common stock
36,000
0
Retained earnings
188,725
126,850
Total liabilities and equity
$520,030
$445,100
SPIRIT COMPANYIncome StatementFor Year Ended December 31, 2013
Sales
$584,000
Cost of goods sold
283,000
Gross profit
301,000
Operating expenses
Depreciation expense
$ 20,000
Other expenses
132,400
152,400
Other gains (losses)
Loss on sale of equipment
5,875
Income before taxes
$142,725
Income taxes expense
24,250
Net income
$118,475
Additional information on year 2013 transactions:
a.
The loss on the cash sale of equipment was $5,875 (details in ).
b.
Sold equipment costing $46,500, for a loss of $5,875.
c.
Purchased equipment costing $99,000 by paying $35,000 cash and signing a long-term note payable for the balance.
d.
Borrowed $2,000 cash by signing a non-sales related short-term note payable.
e.
Paid $47,500 cash to reduce the long-term notes payable.
f.
Issued 2,400 shares of common stock for $20 cash per share.
g.
Net income and dividends were the only items that affected retained earnings.
Required: Determine the cash received by Spirit for the equipment sold in item B above.
A. $5,875B. $11,625C. $46,500D. $17,500E. $20,000
112. Spirit Company, a merchandiser, recently completed its 2013 calendar year. 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, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s balance sheet and income statement follow:
SPIRIT COMPANYComparative Balance SheetDecember 31, 2013 and 2012
2013
2012
Assets
Cash
$ 49,200
$ 73,500
Accounts receivable
65,830
51,000
Merchandise inventory
276,000
252,500
Prepaid expenses
1,000
1,600
Equipment
159,000
106,500
Accum. depreciation—Equipment
(31,000)
(40,000)
Total assets
$520,030
$445,100
Liabilities and Equity
Accounts payable
$ 58,555
$ 112,000
Short-term notes payable
9,000
7,000
Long-term notes payable
65,000
48,500
Common stock, $5 par value
162,750
150,750
Paid-in capital in excess of par, common stock
36,000
0
Retained earnings
188,725
126,850
Total liabilities and equity
$520,030
$445,100
SPIRIT COMPANYIncome StatementFor Year Ended December 31, 2013
Sales
$584,000
Cost of goods sold
283,000
Gross profit
301,000
Operating expenses
Depreciation expense
$ 20,000
Other expenses
132,400
152,400
Other gains (losses)
Loss on sale of equipment
5,875
Income before taxes
$142,725
Income taxes expense
24,250
Net income
$118,475
Additional information on year 2013 transactions:
a.
The loss on the cash sale of equipment was $5,875 (details in ).
b.
Sold equipment costing $46,500, for a loss of $5,875.
c.
Purchased equipment costing $99,000 by paying $35,000 cash and signing a long-term note payable for the balance.
d.
Borrowed $2,000 cash by signing a nonsales-related short-term note payable.
e.
Paid $47,500 cash to reduce the long-term notes payable.
f.
Issued 2,400 shares of common stock for $20 cash per share.
g.
Net income and dividends were the only items that affected retained earnings.
Required: What is the amount of dividends declared and distributed in 2013?
A. $180,350B. $8,375C. $61,875D. $56,600E. $70,250
113. Spirit Company, a merchandiser, recently completed its 2013 calendar year. 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, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s balance sheet and income statement follow:
SPIRIT COMPANYComparative Balance SheetDecember 31, 2013 and 2012
2013
2012
Assets
Cash
$ 49,200
$ 73,500
Accounts receivable
65,830
51,000
Merchandise inventory
276,000
252,500
Prepaid expenses
1,000
1,600
Equipment
159,000
106,500
Accum. depreciation—Equipment
(31,000)
(40,000)
Total assets
$520,030
$445,100
Liabilities and Equity
Accounts payable
$ 58,555
$ 112,000
Short-term notes payable
9,000
7,000
Long-term notes payable
65,000
48,500
Common stock, $5 par value
162,750
150,750
Paid-in capital in excess of par, common stock
36,000
0
Retained earnings
188,725
126,850
Total liabilities and equity
$520,030
$445,100
SPIRIT COMPANYIncome StatementFor Year Ended December 31, 2013
Sales
$584,000
Cost of goods sold
283,000
Gross profit
301,000
Operating expenses
Depreciation expense
$ 20,000
Other expenses
132,400
152,400
Other gains (losses)
Loss on sale of equipment
5,875
Income before taxes
$142,725
Income taxes expense
24,250
Net income
$118,475
Additional information on year 2010 transactions:
a.
The loss on the cash sale of equipment was $5,875 (details in ).
b.
Sold equipment costing $46,500, for a loss of $5,875.
c.
Purchased equipment costing $99,000 by paying $35,000 cash and signing a long-term note payable for the balance.
d.
Borrowed $2,000 cash by signing a non-sales related short-term note payable.
e.
Paid $47,500 cash to reduce the long-term notes payable.
f.
Issued 2,400 shares of common stock for $20 cash per share.
g.
Net income and dividends were the only items that affected retained earnings.
Required: Calculate the net cash flows provided (used) by financing activities.
A. ($118,100)B. $118,100C. $54,100D. ($54,100)E. $2,500
114. Spirit Company, a merchandiser, recently completed its 2013 calendar year. 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, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s balance sheet and income statement follow:
SPIRIT COMPANYComparative Balance SheetDecember 31, 2013 and 2012
2013
2012
Assets
Cash
$ 49,200
$ 73,500
Accounts receivable
65,830
51,000
Merchandise inventory
276,000
252,500
Prepaid expenses
1,000
1,600
Equipment
159,000
106,500
Accum. depreciation—Equipment
(31,000)
(40,000)
Total assets
$520,030
$445,100
Liabilities and Equity
Accounts payable
$ 58,555
$ 112,000
Short-term notes payable
9,000
7,000
Long-term notes payable
65,000
48,500
Common stock, $5 par value
162,750
150,750
Paid-in capital in excess of par, common stock
36,000
0
Retained earnings
188,725
126,850
Total liabilities and equity
$520,030
$445,100
SPIRIT COMPANYIncome StatementFor Year Ended December 31, 2013
Sales
$584,000
Cost of goods sold
283,000
Gross profit
301,000
Operating expenses
Depreciation expense
$ 20,000
Other expenses
132,400
152,400
Other gains (losses)
Loss on sale of equipment
5,875
Income before taxes
$142,725
Income taxes expense
24,250
Net income
$118,475
Additional information on year 2013 transactions:
a.
The loss on the cash sale of equipment was $5,875 (details in ).
b.
Sold equipment costing $46,500, for a loss of $5,875.
c.
Purchased equipment costing $99,000 by paying $35,000 cash and signing a long-term note payable for the balance.
d.
Borrowed $2,000 cash by signing a nonsales-related short-term note payable.
e.
Paid $47,500 cash to reduce the long-term notes payable.
f.
Issued 2,400 shares of common stock for $20 cash per share.
g.
Net income and dividends were the only items that affected retained earnings.
Required: Compute the net cash flows provided (used) by investing activities.
A. ($23,375)B. $23,375C. $46,500D. ($35,000)E. $35,000
115. Spirit Company, a merchandiser, recently completed its 2013 calendar year. 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, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s balance sheet and income statement follow:
SPIRIT COMPANYComparative Balance SheetDecember 31, 2013 and 2012
2013
2012
Assets
Cash
$ 49,200
$ 73,500
Accounts receivable
65,830
51,000
Merchandise inventory
276,000
252,500
Prepaid expenses
1,000
1,600
Equipment
159,000
106,500
Accum. depreciation—Equipment
(31,000)
(40,000)
Total assets
$520,030
$445,100
Liabilities and Equity
Accounts payable
$ 58,555
$ 112,000
Short-term notes payable
9,000
7,000
Long-term notes payable
65,000
48,500
Common stock, $5 par value
162,750
150,750
Paid-in capital in excess of par, common stock
36,000
0
Retained earnings
188,725
126,850
Total liabilities and equity
$520,030
$445,100
SPIRIT COMPANYIncome StatementFor Year Ended December 31, 2013
Sales
$584,000
Cost of goods sold
283,000
Gross profit
301,000
Operating expenses
Depreciation expense
$ 20,000
Other expenses
132,400
152,400
Other gains (losses)
Loss on sale of equipment
5,875
Income before taxes
$142,725
Income taxes expense
24,250
Net income
$118,475
Additional information on year 2013 transactions:
a.
The loss on the cash sale of equipment was $5,875 (details in ).
b.
Sold equipment costing $46,500, for a loss of $5,875.
c.
Purchased equipment costing $99,000 by paying $35,000 cash and signing a long-term note payable for the balance.
d.
Borrowed $2,000 cash by signing a non-sales related short-term note payable.
e.
Paid $47,500 cash to reduce the long-term notes payable.
f.
Issued 2,400 shares of common stock for $20 cash per share.
g.
Net income and dividends were the only items that affected retained earnings.
Required: Compute the net cash flows provided (used) by operating activities using the indirect method.
A. ($53,175)B. $47,300C. $53,175D. ($47,300)E. $128,635
116. Walker Company reports net income of $420,000 for the year ended December 31, 2013. It also reports $75,600 depreciation expense and a gain of $11,000 on the sale of machinery. Its comparative balance sheets reveal a $33,600 decrease in accounts receivable, $17,220 increase in accounts payable, $9,240 increase in prepaid expenses, and $13,020 increase in wages payable. What is the net cash flows provided (used) by operating activities using the indirect method?
A. ($539,200)B. $300,800C. $561,200D. ($300,800)E. $539,200
117. Wessen Company reports net income of $180,000 for the year ended December 31, 2013. It also reports $45,800 depreciation expense, $21,410 amortization expense, and a $15,000 gain on the sale of machinery. Its comparative balance sheets reveal a $28,300 increase in accounts receivable, $20,400 decrease in accounts payable, $10,470 increase in prepaid expenses, and $33,140 decrease in wages payable. What net cash flows are provided (used) by operating activities using the indirect method? A. ($140,200)B. $133,490C. $139,900D. ($133,490)E. $78,300
118. Wessen Company reports net income of $200,000 for the year ended December 31, 2013. It also reports $40,000 depreciation expense, $22,500 amortization expense, and a $15,000 loss on the sale of machinery. Its comparative balance sheets reveal a $225,700 increase in accounts receivable, $31,600 decrease in accounts payable, $15,000 decrease in prepaid expenses, and $48,100 decrease in wages payable. What net cash flows are provided (used) by operating activities using the indirect method?
A. ($12,900)B. $57,900C. $50,400D. ($57,900)E. ($50,400)
119. Selected information from Jet Company’s 2013 financial statements is shown below (in millions):
Inventory decreased $6.0 Accounts payable increased by $7.0
Cost of goods sold $36.50 Salaries expense $24.0
Salaries payable decreased $6.0 Accounts receivable increased by $10.0
Sales $56.4
What is the amount of cash received from Jet’s customers during 2013?
A. $66.4B. $10.0C. $46.4D. $19.9E. $56.4
120. Selected information from Jet Company’s 2013 financial statements is shown below (in millions):
Inventory decreased $6.0 Accounts payable increased by $7.0
Cost of goods sold $36.50 Salaries expense $24.0
Salaries payable decreased $6.0 Accounts receivable increased by $10.0
Sales $56.4
What is the amount of cash paid for purchases by Jet during 2013?
A. $36.5B. $47.5C. $37.5D. $35.5E. $23.5
121. Selected information from Jet Company’s 2013 financial statements is shown below (in millions):
Inventory decreased $6.0 Accounts payable increased by $7.0
Cost of goods sold $36.50 Salaries expense $24.0
Salaries payable decreased $6.0 Accounts receivable increased by $10.0
Sales $56.4
What is the amount of cash paid for salaries by Jet during 2013?
A. $4.0B. $6.0C. $24.0D. $30.0E. $18.0
