/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q13 Indicate in general journal form... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 23: Q13 (page 1374)

Indicate in general journal form how the items below would be entered in a worksheet for the preparation of the statement of cash flows.

(a) Net income is \(317,000.

(b) Cash dividends declared and paid totaled \)120,000.

(c) Equipment was purchased for \(114,000.

(d) Equipment that originally cost \)40,000 and had accumulated depreciation of \(32,000 was sold for \)10,000.

Short Answer

Expert verified

(a) Operating-net income will be debited and retained earnings will be credited by $317,000, respectively.

(b) Retained earnings will be debited, and Financing-Cash dividends will be credited by $120,000, respectively.

(c) Equipment will be debited and Investing-purchase of equipment will be credited by $114,000, respectively.

(d) Investing 鈥� Sale of Equipment will be debited by $10,000, and Accumulated Depreciation- Equipment by $32,000, and Equipmentwill be credited by $40,000 and Operating- Gain on sale of equipment will be credited by $2,000.

Step by step solution

01

:Journal entry to record the net income

Journal

Date

Particulars

Debit ($)

Credit ($)

Operating- Net Income

317,000

Retained Earnings

317,000

(Net income recorded)

02

:Journal entry to record the dividends

Journal

Date

Particulars

Debit ($)

Credit ($)

Retained Earnings

120,000

Financing- Cash dividends

120,000

(Dividends recorded)

03

:Journal entry to record the purchase of equipment

Journal

Date

Particulars

Debit ($)

Credit ($)

Equipment

114,000

Investing 鈥� Purchase of equipment

114,000

(Purchase of equipment recorded)

04

Step 4:Journal entry to record the purchase of equipment

Journal

Date

Particulars

Debit ($)

Credit ($)

Investing 鈥� Sale of Equipment

10,000

Accumulated Depreciation- Equipment

32,000

Equipment

40,000

Operating- Gain on sale of equipment

2,000

(10,000-(40,000-32,000))

(Sales of equipment recorded)

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Question: The Procter & Gamble Company (P&G)

The financial statements of P&G are presented in Appendix B. The company鈥檚 complete annual report, including the notes to the financial statements, is available online.

Instructions

Refer to P&G鈥檚 financial statements and the accompanying notes to answer the following questions.

(a) Which method of computing net cash provided by operating activities does P&G use? What were the amounts of net cash provided by operating activities for the years 2012, 2013, and 2014? Which two items were most responsible for the decrease in net cash provided by operating activities in 2014?

(b) What was the most significant item in the cash flows used for investing activities section in 2014?

What was the most significant item in the cash flows used for financing activities section in 2014?

(c) Where is 鈥渄eferred income taxes鈥� reported in P&G鈥檚 statement of cash flows? Why does it appear in that section of the statement of cash flows?

(d) Where is depreciation reported in P&G鈥檚 statement of cash flows? Why is depreciation added to net income in the statement of cash flows?

What is the purpose of the statement of cash flows? What

information does it provide?

Question: . Classify the following items as (1) operating, (2) investing, (3) financing, or (4) significant noncash investing and financing activities, using the direct method.

(a) Cash payments to employees.

(b) Redemption of bonds payable.

(c) Sale of building at book value.

(d) Cash payments to suppliers.

(e) Exchange of equipment for furniture.

(f) Issuance of preferred stock.

(g) Cash received from customers.

(h) Purchase of treasury stock.

(i) Issuance of bonds for land.

(j) Payment of dividends.

(k) Purchase of equipment.

(l) Cash payments for operating expenses.

Red Hot Chili Peppers Co. had the following activity in its most recent year of operations.

(a) Purchase of equipment. (g) Amortization of intangible assets.

(b) Redemption of bonds payable. (h) Purchase of treasury stock.

(c) Sale of building. (i) Issuance of bonds for land.

(d) Depreciation. (j) Payment of dividends.

(e) Exchange of equipment for the furniture. (k) Increase in interest receivable on notes receivable.

(f) Issuance of common stock. (l) Pension expense exceeds the amount funded.

Instructions

Classify the items as (1) operating鈥攁dd to net income; (2) operating鈥攄educt from net income; (3) investing; (4) financing; or (5) significant noncash investing and financing activities. Use the indirect method.

Each of the following items must be considered in preparing a statement of cash flows (indirect method) for Turbulent Indigo Inc. for the year ended December 31, 2017.

(a) Plant assets that had cost \(20,000 6 years before and were being depreciated on a straight-line basis over 10 years with no estimated scrap value were sold for \)5,300.

(b) During the year, 10,000 shares of common stock with a stated value of \(10 a share were issued for \)43 a share.

(c) Uncollectible accounts receivable in the amount of \(27,000 were written off against Allowance for Doubtful Accounts.

(d) The company sustained a net loss for the year of \)50,000. Depreciation amounted to \(22,000, and a gain of \)9,000 was realized on the sale of land for \(39,000 cash.

(e) A 3-month U.S. Treasury bill was purchased for \)100,000. The company uses a cash and cash equivalent basis for its cash flow statement.

(f) Patent amortization for the year was \(20,000.

(g) The company exchanged common stock for a 70% interest in Tabasco Co. for \)900,000.

(h) During the year, treasury stock costing $47,000 was purchased.

Instructions State where each item is to be shown in the statement of cash flows, if at all.
See all solutions

Recommended explanations on Business Studies Textbooks

Business Operations

Read Explanation

Human 91影视

Read Explanation

Strategic Direction

Read Explanation

Organizational Communication

Read Explanation

Managers

Read Explanation

Nature of Business

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.