Fundamentals Of Financial Accounting
6th Edition
ISBN: 9781259864230
Author: PHILLIPS, Fred, Libby, Robert, Patricia A.
Publisher: Mcgraw-hill Education,
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Chapter 1, Problem 9E
Preparing an Income Statement and
Five individuals organized Miami Music Corporation on January 1. At the end of January 31, the following monthly financial data are available:
| Total Revenues | $131,000 |
| Operating Expenses | 90,500 |
| Cash | 30,000 |
| 25,300 | |
| Supplies | 40,700 |
| Accounts Payable | 25,700 |
| Common Stock | 30,600 |
No dividends were declared or paid during January.
Required:
- 1. Complete the following income statement and balance sheet for the month of January.
| MIAMI MUSIC CORPORATION Income Statement For the Month Ended January 31 |
|||||
| Total Revenues | $_____ | ||||
| Operating Expenses | _____ | ||||
| Net Income | $_____ | ||||
| MIAMI MUSIC CORPORATION Balance Sheet At January 31 |
|||||
| Assets | |||||
| Cash | $_____ | ||||
| Accounts Receivable | _____ | ||||
| Supplies | _____ | ||||
| Total Assets | $_____ | ||||
| Liabilities | |||||
| Accounts Payable | $_____ | ||||
| Total Liabilities | |||||
| Stockholders’ Equity | |||||
| Common Stock | _____ | ||||
| _____ | |||||
| Total Stockholders’ Equity | _____ | ||||
| Total Liabilities and Stockholders’ Equity | $_____ | ||||
- 2. Did Miami Music Corporation generate a profit? Which financial statement indicates this?
- 3. Docs Miami Music Corporation have sufficient resources to pay its liabilities? Which financial statement indicates this?
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Baker Company reported total assets at December 31 totaling $56,600. The following selected amounts were taken from Baker Company’s financial statements for its year ending December 31:
Retained earnings
$33,600
Sales
$70,000
Accounts receivable
3,500
Common stock
15,000
Notes payable
8,000
Net income
17,500
How much is the company’s total shareholders’ equity at December 31?
Group of answer choices
$38,000
$48,600
$10,000
$55,500
Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $49,900; total assets, $179,400; common stock, $84,000; and retained earnings, $35,896.)
CABOT CORPORATION
Balance Sheet
December 31 of current year
Assets
Liabilities and Equity
Cash
$ 20,000
Accounts payable
$ 17,500
Short-term investments
8,200
Accrued wages payable
4,200
Accounts receivable, net
31,400
Income taxes payable
4,300
Merchandise inventory
36,150
Long-term note payable, secured by mortgage on plant assets
69,400
Prepaid expenses
2,850
Common stock
84,000
Plant assets, net
147,300
Retained earnings
66,500
Total assets
$ 245,900
Total liabilities and equity
$ 245,900
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
Sales
$ 450,600
Cost of goods sold
296,950
Gross profit
153,650
Operating expenses
98,600
Interest expense
3,800…
Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31 of the prior year were inventory, $51,900; total assets, $219,400; common stock, $81,000; and retained earnings, $34,953.)
CABOT CORPORATION
Balance Sheet
December 31 of current year
Assets
Liabilities and Equity
Cash
$ 12,000
Accounts payable
$ 16,500
Short-term investments
9,000
Accrued wages payable
3,800
Accounts receivable, net
33,200
Income taxes payable
4,700
Merchandise inventory
36,150
Long-term note payable, secured by mortgage on plant assets
71,400
Prepaid expenses
2,800
Common stock
81,000
Plant assets, net
151,300
Retained earnings
67,050
Total assets
$ 244,450
Total liabilities and equity
$ 244,450
CABOT CORPORATION
Income Statement
For Current Year Ended December 31
Sales
$ 455,600
Cost of goods sold
298,050
Gross profit
157,550
Operating expenses
99,500
Interest expense…
Chapter 1 Solutions
Fundamentals Of Financial Accounting
Ch. 1 - Define accounting.Ch. 1 - Prob. 2QCh. 1 - Briefly distinguish financial accounting from...Ch. 1 - The accounting process generates financial reports...Ch. 1 - Explain what the separate entity assumption means...Ch. 1 - List the three main types of business activities...Ch. 1 - What information should be included in the heading...Ch. 1 - What are the purposes of (a) the balance sheet,...Ch. 1 - Explain why the income statement, statement of...Ch. 1 - Briefly explain the difference between net income...
Ch. 1 - Describe the basic accounting equation that...Ch. 1 - Describe the equation that provides the structure...Ch. 1 - Describe the equation that provides the structure...Ch. 1 - Prob. 14QCh. 1 - Prob. 15QCh. 1 - Prob. 16QCh. 1 - Briefly define what an ethical dilemma is and...Ch. 1 - Prob. 18QCh. 1 - Prob. 1MCCh. 1 - Which of the following is true regarding the...Ch. 1 - Which of the following is false regarding the...Ch. 1 - Which of the following regarding retained earnings...Ch. 1 - Prob. 5MCCh. 1 - Which of the following statements regarding the...Ch. 1 - Prob. 7MCCh. 1 - Which of the following is true? a. FASB creates...Ch. 1 - Which of the following would not be a goal of...Ch. 1 - Prob. 10MCCh. 1 - Prob. 1MECh. 1 - Matching Definitions with Terms or Abbreviations...Ch. 1 - Matching Definitions with Terms Match each...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to Balance...Ch. 1 - Matching Financial Statement Items to the Basic...Ch. 1 - Matching Financial Statement Items to the Four...Ch. 1 - Reporting Amounts on the Statement of Cash Flows...Ch. 1 - Prob. 11MECh. 1 - Preparing a Statement of Retained Earnings Stone...Ch. 1 - Relationships among Financial Statements Items...Ch. 1 - Prob. 14MECh. 1 - Relationships among Financial Statements Items...Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Preparing a Balance Sheet DSW, Inc., is a designer...Ch. 1 - Completing a Balance Sheet and Inferring Net...Ch. 1 - Labeling and Classifying Business Transactions The...Ch. 1 - Preparing an Income Statement and Inferring...Ch. 1 - Preparing an Income Statement Home Realty,...Ch. 1 - Prob. 8ECh. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Analyzing and Interpreting an Income Statement...Ch. 1 - Prob. 11ECh. 1 - Matching Cash Flow Statement Items to Business...Ch. 1 - Preparing an Income Statement. Statement of...Ch. 1 - Interpreting the Financial Statements Refer to...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Evaluating Financial Statements Refer to CP1-3....Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Prob. 2PACh. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Evaluating Financial Statements Refer to PA1-3....Ch. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Interpreting the Financial Statements Refer to PB...Ch. 1 - Reporting Amounts on the Four Basic Financial...Ch. 1 - Evaluating Financial Statements Refer to PB1-3....Ch. 1 - Finding Financial Information Answer the following...Ch. 1 - Comparing Financial Information Refer to the...Ch. 1 - Prob. 5SDCCh. 1 - Prob. 6SDCCh. 1 - Prob. 1CC
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