Homework 0129

Homework 0129 - Exercise 15-26 Riobamba Merchandising...

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Unformatted text preview: Exercise 15-26 Riobamba Merchandising Corporation Sales 375,000 Less: Cost of Goods Sold Beginning Inventory 100,000 Purchases 200,000 Ending Inventory (50,000) (250,000) Less: Depreciation Expense (25,000) Less: Amortization of Patent (5,000) Less: Wages Expense (20,000) Less: Insurance Expense (10,000) Income before Taxes 65,000 Less: Income Taxes (26,000) Net Income 39,000 a A/P decreased by $5,000 b A/R increased by $5,000 c Wages payable increased by $3,000 d Prepaid insurance increased by $6,000 Schedule of operating cash flows Net Income Net Cash from Operations- Exercise 15-27 Riobamba Merchandising Corporation Income Statement 2007 Sales 375,000 Less Cost of Goods Sold Beginning Inventory 100,000 Purchases 200,000 Ending Inventory (50,000) (250,000) Less Depreciation Expense (25,000) Less Amortization of Patent (5,000) Less Wages Expense (20,000) Less Insurance Expense (10,000) Income before Taxes 65,000 Less Income Taxes (all current) (26,000) Net Income 39,000 Accounts payable decreased by 5,000 Accounts receivable increased by 5,000 Wages payable increased by 3,000 Prepaid Insurance increased by 6,000 Statement of Cash Flows (Direct Method) Cash Flows from Operating Activities Income Stmt Adjustment Cash Flow Sales 375,000 375,000 Less Cost of Goods Sold Beginning Inventory 100,000 Purchases 200,000 Ending Inventory (50,000) (250,000) (250,000) Less Depreciation Expense (25,000) (25,000) Less Amortization of Patent (5,000) (5,000) Less Wages Expense (20,000) (20,000) Less Insurance Expense (10,000) (10,000) Income before Taxes 65,000 65,000 Less Income Taxes (all current) (26,000) (26,000) Cash Flows from Operating Activities 39,000 39,000 Problem 15-28 Richmoon Corporation Assets 2007 2008 Change Cash 5,500 9,000 3,500 A/R 15,000 12,000 (3,000) Inventory 3,000 6,000 3,000 Plant and Equipment 20,000 20,000 - Accumulated Depreciation (4,000) (5,000) (1,000) Total Assets 39,500 42,000 2,500 Liabilities and Equity Accounts Payable 6,400 2,000 (4,400) Common Stock 21,200 23,000 1,800 Retained Earnings 11,900 17,000 5,100 Total Liabilities and Equity 39,500 42,000 2,500 Income Statement Sales 33,000 Cost of Goods Sold (19,500) Gross Margin 13,500 Operating Expenses (6,500) Net Income 7,000 Dividends of $1,900 were paid Statement of Cash Flows Cash Flows from Operations Net Income Add (deduct) adjustments Net Cash from Operations- Cash Flows from Investing Activities Cash Flows from Financing Activities Net Cash from Financing- Total change in cash- Problem 15-29 Richmoon Corporation Assets 2007 2008 Change Cash 5,500 9,000 3,500 A/R 15,000 12,000 (3,000) Inventory 3,000...
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Homework 0129 - Exercise 15-26 Riobamba Merchandising...

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