Accounting 202 two problems – forten company& golden corporation

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Problem 12-2AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4

Forten Company, a merchandiser, recently completed its calendar-year 2013 operations. 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 sheets and income statement follow.

FORTEN COMPANY Comparative Balance Sheets December 31, 2013 and 2012
  2013 2012
Assets
Cash $ 49,200   $ 73,000
Accounts receivable 65,890   57,000
Merchandise inventory 276,500   253,000
Prepaid expenses 1,250   1,900
Equipment 158,000   106,500
Accum. depreciation—Equipment (36,500) (46,000)


Total assets $ 514,340   $ 445,400


Liabilities and Equity
Accounts payable $ 63,590   $ 111,000
Short-term notes payable 10,000   6,000
Long-term notes payable 62,500   48,250
Common stock, $5 par value 162,250   150,750
Paid-in capital in excess of par, common stock 34,500   0
Retained earnings 181,500   129,400


Total liabilities and equity $ 514,340   $ 445,400

FORTEN COMPANY Income Statement For Year Ended December 31, 2013
Sales $ 582,500
Cost of goods sold 289,000

Gross profit 293,500
Operating expenses
       Depreciation expense $ 20,000
       Other expenses 134,000 154,000


Other gains (losses)
       Loss on sale of equipment (5,500)

Income before taxes 134,000
Income taxes expense 25,500

Net income $ 108,500

Additional Information on Year 2013 Transactions

a. Net income was $108,500.
b. Accounts receivable increased.
c. Merchandise inventory increased.
d. Prepaid expenses decreased.
e. Accounts payable decreased.
f. Depreciation expense was $20,000.
g. Sold equipment costing $46,500, with accumulated depreciation of $29,500, for $11,500 cash. This yielded a loss of $5,500.
h. Purchased equipment costing $98,000 by paying $30,000 cash and (i.) by signing a long-term note payable for the balance.
j. Borrowed $4,000 cash by signing a short-term note payable.
k. Paid $53,750 cash to reduce the long-term notes payable.
l. Issued 2,300 shares of common stock for $20 cash per share.
m. Declared and paid cash dividends of $56,400.

Required:
Prepare a complete statement of cash flows using a spreadsheet; report its operating activities using the indirect method. (Enter all amounts as positive values.)

Golden Corp., a merchandiser, recently completed its 2013 operations. 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, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company’s balance sheets and income statement follow.

hiododf CORPORATION
Comparative Balance Sheets
December 31, 2013 and 2012
2013 2012
Assets
Cash $ 163,000 $ 135,000
Accounts receivable 84,000 72,000
Merchandise inventory 625,000 515,000
Equipment 345,000 269,000
Accum. depreciation—Equipment (156,000) (103,000)

Total assets $ 1,061,000 $888,000

Liabilities and Equity
Accounts payable $ 164,000 $ 103,000
Income taxes payable 26,000 23,000
Common stock, $2 par value 590,000 568,000
Paid-in capital in excess of par value, common stock 197,000 164,000
Retained earnings 84,000 30,000

Total liabilities and equity $ 1,061,000 $ 888,000

GOLDEN CORPORATION
Income Statement
For Year Ended December 31, 2013
Sales $ 1,800,000
Cost of goods sold 1,088,000

Gross profit 712,000
Operating expenses
Depreciation expense $ 53,000
Other expenses 499,000 552,000
Income before taxes 160,000
Income taxes expense 21,000
Net income $ 139,000

Additional Information on Year 2013 Transactions
a. Purchased equipment for $76,000 cash.
b. Issued 11,000 shares of common stock for $5 cash per share.
c. Declared and paid $85,000 in cash dividends.

Required:
Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

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July 1, 2023

9.1 The United States in the International Economy

1) Following the tariff imposed on Chinese tires, some businesspeople correctly argued that the U.S. tariff would result in

A) China retaliating by raising tariffs on some U.S. exports.

B) China halting the sale of all products in the United States.

C) U.S. firms never being able to meet the demand for U.S.-produced tires.

D) the government demanding price cuts from U.S. tire manufacturers.

2) Workers in industries protected by tariffs and quotas are likely to support these trade restrictions because

A) they do not want to offend their employers who want them.

B) politicians lobby to convince workers the restrictions will make them better off.

C) they believe the restrictions will protect their jobs.

D) they don't understand that the restrictions will threaten their jobs.

3) The intention of the U.S. tariff on Chinese tires was to

A) protect jobs in the U. S. tire industry.

B) protect infant industries in tire U.S. tire market.

C) insure that Chinese tires meet U.S. quality and safety standards.

D) save the government money by restricting the sale of more expensive Chinese-made tires.

4) In the 1930s, the United States charged an average tariff rate ________. Today, the rate is ________.

A) of 100 percent; 20 percent

B) above 50 percent; less than 1.5 percent

C) of less than 10 percent; over 40 percent

D) of 17 percent; 33 percent

5) A tariff is a tax imposed by a government on

A) exports.

B) services.

C) imports.

D) luxury items.

6) Goods and services bought domestically but produced in other countries are referred to as

A) exports.

B) imports.

C) transfer payments.

D) foreign consumption.

7) Exports are domestically produced goods and services

A) sold to other countries.

B) sold to the government.

C) sold at home.

D) which are used to produce other goods and services.

8) When Roxanne, a U.S. citizen, purchases a designer dress from Barneys of New York that was made in Milan, the purchase is

A) both a U.S. and an Italian import.

B) a U.S. import and an Italian export.

C) a U.S. export and an Italian import.

D) neither an export nor an import for either country.

9) When BMW, a German company, purchases a welding machine that was made in Toronto, the purchase is

A) both a German and a Canadian import.

B) a German import and a Canadian export.

C) a German export and a Canadian import.

D) neither an export nor an import for either country.

10) Which of the following statements about the importance of trade to the U.S. economy is true?

A) Since 1950, both exports and imports have steadily decreased as a fraction of U.S. gross domestic product.

B) Overall, about 80 percent of U.S. manufacturing jobs depend directly or indirectly on exports.

C) The United States is the second largest exporter in the world.

D) The U.S. economy is highly dependent on international trade for growth in its gross domestic product.