Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN: 9781305654174
Author: Gary A. Porter, Curtis L. Norton
Publisher: Cengage Learning
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Chapter 1, Problem 1.6AP
Income Statement and
Fort Worth Corporation began business in January 2016 as a commercial carpet-cleaning and drying service. Shares of stock were issued to the owners in exchange for cash. Equipment was purchased by making a down payment in cash and signing a note payable for the balance. Services are performed for local restaurants and office buildings on open account, and customers are given 15 days to pay their accounts. Rent for office and storage facilities is paid at the beginning of each month. Salaries and wages are paid at the end of the month. The following amounts are from the records of Fort Worth Corporation at the end of its first month of operations:
Required
- Prepare an income statement for the month ended January 31, 2016.
- Prepare a balance sheet at January 31, 2016.
- What information would you need about Notes Payable to fully assess Fort Worth’s longterm viability? Explain your answer.
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Revenue and Expense Recognition
Aunt Bea's Catering Service provides catering service for special occasions. During 2013, Aunt Bea performed $228,500 of catering services and collected $218,200 of cash from customers. Salaries earned by Aunt Bea's employees during 2013 were $49,900. Aunt Bea paid employees $45,100 during 2013. Aunt Bea had $1,200 of supplies on hand at the beginning of the year and purchased an additional $12,640 of supplies during the year. Supplies on hand at the end of 2013 were $2,820. Other selling and administrative expenses incurred during 2013 were $10,800.
Required:
1. Calculate revenue for 2013.$
Calculate expenses for 2013.$
Hide
2. Prepare the 2013 income statement.
Aunt Bea's Catering Service
Income Statement
For the Year Ended December 31, 2013
$
Expenses:
$…
After tax returns were filed ASKnow! needs to compile cash flows and relevant accrual information
Description
2015(Cash Flows)
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$182,000
ASKnow billings totaled $30,000, and were paid by the businesses within 15 days of the following month.
EXPENSES
Food costsBy year-end, only one week of food costs remained unpaid, totaling $9,000
$60,000
Supply costsSmall office items paid with petty cash.
$4,800
UtilitiesAt the end of the year, one month of electricity, telephone, and water remained unpaid.
$8,000
Employee wages
These costs were kept fairly low one week of wages ($1,400) remained due.
$44,000
Licenses
April 1, 2015
$900
Insurance
A comprehensive insurance policy was purchased on April 1, 2015. The policy covered loss due to theft, fire, or storm damage. The policy also covered business-related risks such as lawsuits arising from customer injury. This policy covers three years.
$18,000
Income taxesincome taxes…
Chapter 1 Solutions
Financial Accounting: The Impact on Decision Makers
Ch. 1 - Prob. 1.1KTQCh. 1 - Prob. 1.1ECh. 1 - Prob. 1.2ECh. 1 - The Accounting Equation For each of the following...Ch. 1 - The Accounting Equation Ginger Enterprises began...Ch. 1 - The Accounting Equation Using the accounting...Ch. 1 - Changes in Owners Equity The following amounts are...Ch. 1 - The Accounting Equation For each of the following...Ch. 1 - Classification of Financial Statement Items...Ch. 1 - Classification of Financial Statement Items Regal...
Ch. 1 - Net Income (or Loss) and Retained Earnings The...Ch. 1 - Statement of Retained Earnings Ace Corporation has...Ch. 1 - Accounting Principles and Assumptions The...Ch. 1 - Prob. 1.13ECh. 1 - Prob. 1.14ECh. 1 - Prob. 1.15MCECh. 1 - Prob. 1.16MCECh. 1 - Prob. 1.1PCh. 1 - Users of Accounting Information and Their Needs...Ch. 1 - Prob. 1.3PCh. 1 - Prob. 1.4PCh. 1 - Income Statement, Statement of Retained Earnings,...Ch. 1 - Income Statement and Balance Sheet Green Bay...Ch. 1 - Prob. 1.7PCh. 1 - Statement of Retained Earnings for The Coca-Cola...Ch. 1 - Prob. 1.9PCh. 1 - Prob. 1.10MCPCh. 1 - Prob. 1.1APCh. 1 - Users of Accounting Information and Their Needs...Ch. 1 - Prob. 1.3APCh. 1 - Prob. 1.4APCh. 1 - Income Statement, Statement of Retained Earnings,...Ch. 1 - Income Statement and Balance Sheet Fort Worth...Ch. 1 - Corrected Financial Statements Heidis Bakery Inc....Ch. 1 - Statement of Retained Earnings for Brunswick...Ch. 1 - Prob. 1.9APCh. 1 - Prob. 1.10AMCPCh. 1 - Prob. 1.1DCCh. 1 - Reading and Interpreting Chipotles Financial...Ch. 1 - Comparing Two Companies in the Same Industry:...Ch. 1 - Prob. 1.5DCCh. 1 - Prob. 1.6DCCh. 1 - Prob. 1.7DC
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