Mgmt_200_Spring_2008_solutions_1-11-08(1,11)

Mgmt_200_Spring_2008_solutions_1-11-08(1,11) - 26,000...

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Management 200 – Introductory Financial Accounting– Spring 2008 Krannert School of Management - Purdue University Solutions to class assignment for January 11, 2008 E1–10. CLAY CORPORATION Income Statement For the Month of January 2006 Total revenues $150,000 Less: Total expenses (excluding income tax) 100,000 Pretax income $ 50,000 Less: Income tax expense 15,000 Net income $ 35,000 CLAY CORPORATION Balance Sheet At January 31, 2006 Assets Cash $20,000 Receivables from customers 25,000 Merchandise inventory 42,000 Total assets $87,000 Liabilities: Payables to suppliers $11,000 Income taxes payable 15,000 Total liabilities 26,000 Stockholders' equity: Contributed capital (2,600 shares)
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Unformatted text preview: 26,000 Retained earnings (from income statement above) 35,000 Total stockholders equity 61,000 Total liabilities and stockholders' equity $87,000 E115. 1 PAUL'S PAINTERS Cash Flow from Operations For the Month of January 2006 Cash Inflows Cash services $105,000 Cash Outflows: Salaries and wages $50,000 Other expenses paid 26,000 Total cash outflows 76,000 Difference: Net increase (decrease) in cash $29,000 2 Reconciliation with income: Income $41,000 Non-cash services (30,500) Non-cash expenses ($3,000 + $2,000 + $13,500) 18,500 Net increase (decrease) in cash $29,000...
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Mgmt_200_Spring_2008_solutions_1-11-08(1,11) - 26,000...

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