Assignment 01 (10%) (CHAPTER 04)Dear Student,
Please keep in mind the following while doing the assignment
1. This assignment is worth 10% of your total assessments. This is a group assignment.
2. Hard copies are not accepted. One group member uploads the answer on the Blackboard.
Your answer must be neat, organized, and clear.
3. The link will not be available to you after 11:59pm on Wednesday. March 13rd
2024. No requests for an extension of the deadline will be entertained. You
have unlimited attempts.
1. The trial balance of Brothers Ltd included the following accounts as of December 31, 2023:
Dr.
Sales revenue
Interest revenue
Gain on sale of investments
Loss on flood
Cost of goods sold
Salaries and wages
Write-off Inventory
Depreciation expense
Interest expense
Marketing and administrative
Cr.
$1,800,000
80,000
50,000
300,000
$1,100,000
220,000
30,000
150,000
40,000
50,000
Brothers Ltd had 100,000 shares outstanding throughout the year. Income tax expense has not yet been
accrued. The effective tax rate is 30%
Required: Prepare a multiple-step income statement with earnings per share disclosure.
Multiple step income statement.
2. The chief accountant for Ahmad Co. provides you with the company’s most recent income
statement and comparative statements of financial position below. (5 marks)
Sales revenue
Cost of goods sold
Operating expenses
Depreciation expense
loss on disposal of equipment
Interest expense
Income before income tax
Income tax expense
Net Income
Assets
Current assets
Cash
Accounts receivable
Inventory
Prepaid expenses
property, plant and equipment
Land
Building
Accumulated depreciation – Building
Equipment
Accumulated depreciation – Equipment
Total assets
Liabilities and stockholder equity
Accounts payable
Income taxes payable
Long-term liabilities
Bonds
Stockholders’ equity
Ordinary share capital
Retained earnings
Total liabilities and shareholders
760,500
225,000
166,500
13,500
4,500
63,000
472,500
288,000
70,500
217,500
Dec.31.2021
Dec.31.2020
82,500
30,000
22,500
7,500
195,000
240,000
(16,500)
40,500
(4,500)
$597,000
49,500
45,000
15,000
1,500
30,000
60,000
(7,500)
15,000
(1,500)
$207,000
2,000
9,000
195,000
105,000
246,000
$597,000
18,000
12,000
30,000
75,000
72,000
$207,000
Additional information:
1. The company sold equipment with a book value of $10,500 (cost $12,000, less
accumulated depreciation $1,500) for $6,000 cash.
2. Issued $165,000 of long-term bonds in direct exchange for land.
3. A building costing $180,000 was purchased for cash. Equipment costing $37,500
was also purchased for cash.
4. Issued common stock for $30,000 cash.
Required: Prepare a statement of cash flows for 2021 using the indirect method. Assume that
dividends paid are classified as financing cash flows.
Statement of Cashflow
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