2013

Cash and Cash Equivalents

Receivables, net
Inventory
Other Current Assets
Property and Equipment, at cost
Accumulated Depreciation and Amortization
Goodwill
Deferred Tax Asset
Accounts Payable
Accrued Salaries and Related Expenses
Sales Taxes Payable
Deferred Revenue
Income Taxes Payable
Current Installments of Long-Term Debt
Other Accrued Expenses
Long-Term Debt, excluding current installments
Other Long-Term Liabilities
Deferred Tax Liability
Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Income
Treasury Stock
Common stock
Net Sales
Cost of Sales
Selling, General and Administrative
Depreciation and Amortization
Interest and Investment Income
Interest Expense
Provision for Income Taxes
Foreign Currency Translation Adjustments
Cash Flow Hedges, net of tax
Other Comprehensive Income
Dividends
Tax rate
Shares Issued Under Employee Stock Plans
Tax Effect of Stock-Based Compensation
Restricted Stock
Repurchases of Common Stock

1,929.00
1,398.00
895.00
39,064.00
(15,716.00)
1,289.00
88.00
5,797.00
1,428.00
396.00
1,337.00
12.00
33.00
1,746.00
14,691.00
2,042.00
8,402.00
23,180.00
46.00
(19,194.00)
88.00
78,812.00
16,597.00
1,627.00
(12.00)
711.00
(3,082.00)
(12.00)
(10.00)
(2,243.00)
40%
103.00
123.00
228.00
(8,500.00)

2012
2,494.00
1,413.00
11,512.00
900.00
38,491.00
(17,473.00)
1,046.00
473.00
5,192.00
1,200.00
472.00
1,262.00
(107.00)
(783.00)
1,794.00
9,475.00
2,029.00
545.00
7,948.00
20,038.00
397.00
(10,694.00)
88.00
74,754.00
48,912.00
16,508.00
1,568.00
(87.00)
632.00
(2,686.00)
100.00
5.00
(1.00)
(1,743.00)
40%
678.00
82.00
222.00
(4,000.00)

Additional Info:
Cash Sales
Collections on Receivables

4,523.00
6,739.00

4,356.00
6,038.00

Purchases
Wages
Payments to Suppliers
Tax Payments
Interest payments
Capital Expenditures
Payments for Businesses Acquired
Proceeds from Sales of Property and Equipment
Proceeds from Long-Term Borrowings
Repayments of Long-Term Debt
Repurchases of Common Stock
Proceeds from Sales of Common Stock
Cash Dividends Paid to Stockholders
Other Financing Activities

(1,332.00)
(987.00)
(1,028.00)
(275.00)
(12.00)
(1,389.00)
(206.00)
88.00
5,222.00
(1,289.00)
(8,546.00)
241.00
(2,243.00)
(37.00)

(1,276.00)
(905.00)
(1,121.00)
(204.00)
(10.00)
(1,312.00)
(170.00)
50.00
(32.00)
(3,984.00)
784.00
(1,743.00)
(59.00)

Week #2With the general data provided the following Financial Statements for ABC Company:
-Balance Sheet
-Income Statement
-Calculate Cost of Goods Sold Using Average Cost Method
-Calculate Depreciation Expense using the straight-line method
-Calculate Deferred tax asset/liability

ABC Company
Consolidated Balance Sheet
For the Year Ended December 31, 2013
2013

2012

Current Assets:
Cash and Cash Equivalents
Receivables, net
Inventory
Inventory Correction
Other Current Assets
Total Current Assets

1,929.00
1,398.00
11,061.83
1,285.00
895.00
16,568.83

2,494.00
1,413.00
11,512.00
900.00
16,319.00

Property and Equipment, at cost

Less: Accumulated Depreciation and Amortization
Accumulated depreciation correction
Net Property and Equipment

39,064.00
(15,716.00)
(1,505.00)
21,843.00

38,491.00
(17,473.00)
21,018.00

Goodwill
Deferred Tax Asset
Total Assets

1,289.00
690.00
40,390.83

1,046.00
473.00
38,856.00

ASSETS:

LIABILITIES AND STOCKHOLDERS EQUITY:

Current Liabilities:
Accounts Payable
Accrued Salaries and Related Expenses
Sales Taxes Payable
Deferred Revenue
Income Taxes Payable
Current Installments of Long-Term Debt
Other Accrued Expenses
Total Current Liabilities:

5,797.00
1,428.00
396.00
1,337.00
12.00
33.00
1,746.00
10,749.00

Long-Term Debt, excluding current installments

Other Long-Term Liabilities
Deferred Tax Liability
Total Liabilities:

14,691.00
2,042.00
514.00
27,996.00

9,475.00
2,029.00
545.00
21,079.00

Common Stock
Paid-In Capital
Retained Earnings
Accumulated Other Comprehensive Income
Treasury Stock
Total Stockholders Equity

88.00
8,402.00
23,052.83
46.00
(19,194.00)
12,394.83

88.00
7,948.00
20,038.00
397.00
(10,694.00)
17,777.00

Total Liabilities and Stockholders Equity

40,390.83

38,856.00

5,192.00
1,200.00
472.00
1,262.00
(107.00)
(783.00)
1,794.00
9,030.00

STOCKHOLDERS EQUITY:

ABC Company
Income Statement
For the Year Ended December 31, 2013
2013

2012

NET SALES
Cost of Goods Sold
GROSS PROFIT

78,812.00
51,417.02
27,394.98

74,754.00
48,912.00
25,842.00

Operating Expenses:
Selling, General and Administrative
Depreciation and Amortization
Total Operating Expenses

16,597.00
1,627.00
18,224.00

16,508.00
1,568.00
18,076.00

9,170.98

7,766.00

OPERATING INCOME
Interest and Other (Income) Expense:
Interest and Investment Income
Interest Expense
Interest and Other, net

(12.00)
711.00
699.00

(87.00)
632.00
545.00

EARNINGS BEFORE PROVISION FOR INCOME TAXES

8,471.98

7,221.00

Income Taxes

(3,082.00)

(2,686.00)

NET INCOME

5,389.98

4,535.00

(A) Depreciation Expense Using Straight-Line MethodABC Company has the following assets acquired on January 1, 2013 requiring depreciation calculation:
Asset
Cost
Life
Plant with 30 year life at a cost of $660,000
660,000
30
Land at a cost of $2,250,000
2,250,000
Machinery and Equipment with 20 year life at a cost
79,000
20
of 79,000.
Truck with a life of 7 years at a cost of $42,000
42,000
7
3,031,000
Journal Entry

Debit

Depreciation Expense
Accumulated Depreciation on Plant
Accumulated Depreciation on Machinery & equipment
Accumulated Depreciation on Truck

Credit
Amount $
$31,950

Amount $
$22,000
$3,950
$6,000

(B) Inventory CalculationA physical inventory on December 31, 2013, shows 810 units on hand.
Calculate Cost of Goods Sold (COGS) using average cost.
Purchases
Beginning Inventory
January 5, 2014
March 25, 2014
June 8, 2014
September 15, 2014
December 15, 2014
Average Cost
COGS as of 12/31/2013
Ending Inventory

Units

Cost
800
950
950
745
625
505
4,575

14.39
13.46
12.81
13.65
13.25
14.97

3,765
810

Entry to update CGS:

Ending Inventory
Cost of Goods Sold

Journal Entry
Cost of Goods Sold
Inventory

11,061.83
51,417.02

Debit
51417.02

50,967
11,512
Credit
51,417.02

First in First Out

Cost of Goods Sold
Ending Inventory

3,765
810

Last in First out

Cost of Goods Sold
Ending Inventory

3,765
810

Beginning Inventory + Inventory Purchases End Inventory = Cost of Goods Sold

(C ) Error Corrections(1) An error was discovered during 2013 relating to the understatement of depreciation expense in 2011
resulting in a Prior Period Adjustment of $1,505 before taxes.
(2) ABC Company changed its method of valuing inventory during 2013. The cumulative increase in income
from the change in inventory methods was $1,285 before taxes.

Journal Entry

Debit
Amount $

Retained Earnings
Deferred Tax Asset

Credit
Amount $
$903
$602

Accumulated Depreciation

Journal Entry
Inventory

$1,505

Debit
$1,285
Deferred Tax Liability
Retained earnings

Credit
$514
$771

(15.00)
(450.17)
(5.00)

1,757.00

605.00
228.00
75.00
119.00
(48.00)

13.00
(31.00)

C124

Annual Dep. Expense

22,000
3,950

come

6,000
31,950

Total
11,512
12,787
12,170
10,169
8,281
7,560
62,479

Purchase
Purchase
Purchase
Purchase
Purchase
Total Purchases
51,417.02
11,061.83

50,877.75
11,601.10

50832.25
11646.60