Analyzing Transactions Using the Financial Statement Effects TemplateFollowing are selected transactions of Mogg Company. Record the effects of ea
1. Shareholders contribute $10,000 cash to the business in exchange for comm
2. Employees earn $500 in wages that have not been paid at period-end.
3. Inventory of $3,000 is purchased on credit.
4. The inventory purchased in transaction 3 is sold for $4,500 on credit.
5. The company collected the $4,500 owed to it per transaction 4.
6. Equipment is purchased for $5,000 cash.
7. Depreciation of $1,000 is recorded on the equipment from transaction 6.
8. The Supplies account had a $3,800 balance at the beginning of this period;
a physical count at period-end shows that $800 of supplies are still available. N
9. The company paid $12,000 cash toward the principal on a note payable; als
10. The company receives $8,000 cash in advance for services to be delivered
No.
Cash
Non-Cash Assets
Liabilities
Capital Stock
ent Effects Template
. Record the effects of each using the financial statement effects template.
ess in exchange for common stock.
paid at period-end.
$4,500 on credit.
ansaction 4.
nt from transaction 6.
beginning of this period;
pplies are still available. No supplies were purchased during this period.
al on a note payable; also, $500 cash is paid to cover this note’s interest expense for th
r services to be delivered next period.
Retained Earnings
Revenues
Expenses
nterest expense for the period.
Cullumber Inc. had the following balance sheet at December 31, 2016.
Assets
Cash
Accounts Receivable
Investments
Net Equipment
Land
Liabilities
21,100
22,300
33,100
81,000
41,100
Accounts Payable
Notes Payable (Long-term)
Stockholders Equity
Common Stock
Retained Earnings
Total Assets
198,600
Total Liab and SEquity
During 2017, the following occurred.
1
Cullumber Inc. sold part of its equity investment portfolio for $1
2
A tract of land was purchased for $14,100 cash.
3
Long-term notes payable in the amount of $16,216 were retired
4
An additional $20,216 in common stock was issued at par.
5
Dividends of $8,416 were declared and paid to stockholders.
6
Net income for 2017 was $33,100 after allowing for depreciation
7
Land was purchased through the issuance of $36,100 in bonds.
8
At December 31, 2017, Cash was $38,100, Accounts Receivable w
Prepare a Cash Flow Statement for the Year ending Dec 31st 2017.
31,100
42,100
101,100
24,300
198,600
ent portfolio for $15,216. This transaction resulted in a gain of $3,616 for the firm.
6,216 were retired before maturity by paying $16,216 cash.
ssued at par.
o stockholders.
ng for depreciation of $11,216.
$36,100 in bonds.
counts Receivable was $42,700, and Accounts Payable remained at $31,100.
Refer to the balance sheets and income statement below for Facebook Inc.
Required
a. Compute RNO
b. Compute net
c. Compute ROE
d. Infer the non
Required:
a. What amount of bad debts expense will Collins report in its income statement for th
b. How would you answer to the question a. change if the Allowance Account was “ove
c. For your answer in a., use the financial statement effects template below to record C
Cash
NonCash
Assets
Capital
Liabilities Stock
Retained
Earnings
Revenues
Expenses
d. For your answer in a. what is the balance of accounts receivable on it December 31s
e. Say in the next year on Jan 31st, a write-off of $1,700 occurs. What would be the val
the Allowance account and Net Accounts Receivable immediately after the write-off.
Use the financial statement effects template to record the above write-off for the year
Cash
NonCash
Assets
Capital
Liabilities Stock
Retained
Earnings
Revenues
Expenses
a. Compute the current ratio an
b. Compute total liabilities-to-eq
c. Compute times interest earne
and free operating cash flow to
“Included in Interest expense (i
investment portfolio of $82 mil
For this part, define EBIT as ope
d. Which of the following descri
operating cash flow to total deb
i) Nike’s free operating cash flow
from operations and a decrease
ii) Nike’s times interest earned d
iii) Nike’s cash from operations
from operations and a decrease
iv) Nike’s times interest earned
e. Summarize your findings in a
Do you have any concerns abou
Keep your answer to within 50 w
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