Scribd Logo
Upload

Welcome to Scribd!

  • 12 views

    Group Assignment

    Uploaded by

    Kim Thuý

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Group Assignment

    Uploaded by

    Kim Thuý
    12 views2 pages

    Original Title

    Group Assignment (1)

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    12 views2 pages

    Group Assignment

    Uploaded by

    Kim Thuý

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 2

    Question 1:

    The following cash flow information pertains to the 2014 operations of Fishmaster, Inc., a

    maker of fishing equipment.

    Cash collections from customers $79,533

    Cash payments to suppliers 64,097

    Cash payments for selling and administrative expenses 11,166

    Cash payments for interest 1,548

    Cash payments for current income taxes 2,350

    Cash provided by operating activities 372

    The following additional information comes from Fishmaster’s 2014 income statement:

    Net income $3,728

    Depreciation of equipment 6,380

    Gain on sale of equipment 1,327

    The following additional information comes from Fishmaster’s 2013 and 2014 comparative
    balance sheets (decreases are in parentheses):

    Change in accounts receivable $ 1,850

    Change in inventory 5,299

    Change in accounts payable (1,711)

    Change in accrued selling and administrative expenses 910

    Change in deferred taxes payable (342)

    Change in accrued interest payable (117)

    Required:

    1. Use the preceding information to derive Fishmaster’s 2014 income statement.

    2. Use the same information to compute Fishmaster’s 2014 cash flow from operating activities

    under the indirect method (that is, derive cash flow from operating activities by making

    the necessary adjustments to net income).


    3. Provide a brief explanation for the difference observed between net income and cash

    provided by operating activities.

    Question 2:

    On January 2, 2014, Yardley Company sold a plant to Ivory Inc. for $1,500,000. On that date, the
    plant’s carrying cost was $1,000,000. Ivory gave Yardley $300,000 cash and a $1,200,000 note,
    payable in four annual installments of $300,000 cash plus 12% interest. Ivory made the first
    principal and interest payment of $444,000 on December 31, 2014. Yardley uses the installment
    method of revenue recognition.

    Required:

    In its 2014 income statement, what amount of realized gross profit should Yardley report?

    Question 3:

    The following information is provided for Kelly Plumbing Supply.

    Cash received from customers during December 2014 $387,000

    Cash paid to suppliers for inventory during December 2014 131,000

    Cash received from customers includes November accounts receivables of $139,000. Sales
    totaling $141,000 were made on account during December and are expected to be collected in
    January 2015. Cash paid to suppliers in December included payments of $19,000 for inventory
    purchased and used in November. All inventory purchased in December and $39,000 of
    inventory purchased in November was used in December.

    Required:

    What is gross profit for the month of December under accrual accounting?

    You might also like