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Accounting exercise

Accounting exercise - Dang Vuong Anh Advanced Finance I48...

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Dang Vuong Anh Advanced Finance I48 - NEU BE1-4 (a) Advertising expense (E) (b) Service revenue (R) (c) Insurance expense (E) (d) Salaries expense(E) (e) Dividends(D) (f) (NSE) (g) Utilities expense(E) (h) Equipment expense(E) (i) Common stock(C) BE1-10 (a) A (b) L (c) A (d) A (e) SE (f) L E1-15 (a) $30,000 (b) $170,000 (c) $30,000 (d) $40,000 (e) $125,000 (f) $120,000
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Dang Vuong Anh Advanced Finance I48 - NEU E1-10 (a) (SE) Returned Earning $2,701.3 (L) Long-term debt $3,892.6 (E) Cost of Good sold 5,298.7 (A) Inventories 681.0 (E) Selling and Administrative expense 2,634.1 (R) Net sales 9,631.9 (L) Account Payable 767.2 (A) Cash 417.4 (SE) Common Stock 103.8 (L) Notes Payable 709.7 (E) Income Tax expense 475.3 (E) Interest expense 308.6 (E) Other expense 6.6 (b) KELLOGG COMPANY Income Statement For the Year Ended December 31, 2004 (in millions) Revenue Net Sales $9,613.9 Expenses Cost of Good sold Expense $5,298.7 Selling and Administrative expense 2,634.1 Interest expense 308.6 Income Tax expense 475.3 Other expense 6.6 Total expense 8,723.3 Net Income $ 890.6 P1-5A
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Dang Vuong Anh Advanced Finance I48 - NEU (a) 1. According to economy entity assumption, Scott can not list the Boat as an assets and the boat loan as a liability of Silberman Corporation because the boat doesn’t belong to the corporation. 2. According to cost principle and conservatism constraint, the inventory should be record with the market price – $21,000 because its cost here is greater than its price. 3. The money that Scott’s brother borrowed from him is just a personal loan and it’s have no impact on Silberman Corporation. So Scott can not record is as an account receivable. (b) SlLBERMAN CORPORATION Balance Sheet December 31, 2007 Assets Cash $20,000 Account receivable 43,000 Inventory 21,000 Total assets $84,000 Liabilities and Stockholders’ Equity Liabilities Notes payable $15,000 Account payable 40,000 Total Liabilities $55,000 Stockholders’ Equity Total Stockholders’ Equity 29,000 Total Liabilities and Stockholders’ Equity $84,000 BE2-8 (a) Provides a basis for forecasts (b) Confirms or corrects prior expectations (c) Verifiable (d) A faithful representation
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Dang Vuong Anh Advanced Finance I48 - NEU (e) Comparability BE2-10 (a) Predictive value (b) Neutral (c) Verifiable (d) Timely E2-1 (CL) Account payable and accrued liabilities (CL) Income taxes payable (CA) Inventories (CA) Accounts receivable (LTL) Investments (PPE) Accumulated Depreciation (PPE) Land (PPE) Buildings (LTL) Long-term debt (CA) Cash and short-term investments (CL) Material and Supplies (CL) Dividends payable (PPE) Office Equipments and Furniture (IA) Goodwill (CA) Prepaid expense E2-4 DONOVAN CO. Balance Sheet For the Year Ended December 31, 2007 Assets Current Assets Cash $16,840 Accounts Receivable 12,600 Prepaid insurance 4,680 Total Current Assets $34,120 Property, plant, and equipment
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Dang Vuong Anh Advanced Finance I48 - NEU Land 61,200 Building $105,800 Less: Accumulated depreciation 45,600 Equipment 82,400 Less: Accumulated depreciation – equipment 18,720 185,080 Total Assets $219,200 Liabilities and Stockholders’ Equity Current Liabilities Accounts payable $9,500 Interest payable 3,600 Mortgage payable 13,600 Total Current Liabilities $26,700 Long-term liabilities
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