Homework 5 - Emily Leung Accounting 221 March 7th 2011 TA L...

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Emily Leung Accounting 221 March 7 th , 2011 TA: L. Martin Homework: 4-3; 4-5; 4-7; 4-13; 4-14; 4-15; 4-17 (4-3A) During 2011, Kwon Merchandising Company purchased $20,000 of inventory on account. The company sold inventory on account that cost $15,000 for $22,500. Cash payments on accounts payable were $12,500. There was $20,000 cash collected from accounts receivable. Kwon also paid $4,000 cash for operating expenses. Assume that Kwon started the accounting period with $18,000 cash and common stock. a. Identify events described in the preceding paragraph and record them in a horizontal statements model like the following one: Ass ets = Liab . + Equ ity Rev. - Exp. = Net Inco me Cash Flows Cash + Accts. Rec. + Inv. = Accts Pay + Com. Stk. + Ret. Earn. - = 18,000 18,000 b. What is the balance of accounts receivable at the end of 2011? ____________________________ c. What is the balance of accounts payable at the end of 2011? _______________________________ d. What are the amounts of gross margin and net income for 2011? _________________________ e. Determine the amount of net cash flow from operating activities. _________________________ f. Explain any differences between net income and net cash flow from operating activities. _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________
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_______________________________________________________________________________ _______________________________________________________________________________ _____________________ (4-5A) For each of the following events, indicate whether the freight terms are FOB destination or FOB shipping point. a. Sold merchandise and paid the freight cost __________________________________________________ b. Purchased merchandise and paid the freight cost ___________________________________________ c. Sold merchandise and the buyer paid the freight costs _____________________________________ d. Purchased merchandise and the seller paid the freight costs. ______________________________ (4-7A) The trial balance for The Copy Shop as of January 1,2011 was as follows: Account Titles Debit Credit Cash $6,000 Inventory 3,000 Common Stock $7,500 Retained Earnings 1,500 Total $9,000 $9,000 The following events affected the company during the 2011 accounting period:
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Homework 5 - Emily Leung Accounting 221 March 7th 2011 TA L...

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