 
|
Accounting 211
Tuesday, March 16th, 1999
Announcements:
Exam #2 Results: Range = 30-96, Average = 70.7%
Lecture notes:
Cash Flow Statement Classifications
Operations: everyday profit seeking activities
Investing: acquisitions and dispositions of long term assets
Financing: issuance and retirement of debt and equity
*see page 1184, sample exam #3--questions 43-52
|
ACCOUNTS RECEIVABLE |
|
Credit Sales |
Cash Collections |
|
INVENTORY |
|
Purchases |
Cost of Goods Sold |
|
ACCOUNTS PAYABLE |
|
Cash Payments |
Purchases |
Example:
|
1/1/98 |
12/31/98 |
|
Accounts Receivable |
15,000 |
19,000 |
|
Inventory |
21,000 |
15,000 |
|
Accounts Payable |
41,000 |
49,000 |
98 Net Sales = $79,000
Cost of Goods Sold = $45,000
Cash Collected from Customers
|
ACCOUNTS RECIEVABLE |
|
Beginning Balance = 15,000
Credit Sales |
Cash Collections
|
|
Ending Balance = 19,000 |
|
Credit Sales > Cash Collected by $4,000
|
Net Sales |
79,000 |
|
- AR |
- 4,000 |
|
Cash Collected |
75,000 |
Cash Payments to Suppliers
|
INVENTORY |
|
Beginning Balance = 21,000
Purchases |
Cost of Goods Sold
|
|
Ending Balance = 15,000 |
|
COGS > Purchases by $6,000
|
COGS |
45,000 |
|
- Inventory |
- 6,000 |
|
Purchases |
39,000 |
|
ACCOUNTS PAYABLE |
|
Cash Payments
|
Beginning Balance = 41,000
Purchases |
|
49,000 |
Purchases > Cash by $8,000
|
Purchases |
39,000 |
|
- AP |
- 8,000 |
|
Cash Payments |
31,000 |
Example:
|
1/1/97 |
12/31/97 |
|
Inventory |
75,000 |
83,000 |
|
Accounts Receivable |
100,000 |
81,000 |
|
Accounts Payable |
51,000 |
45,000 |
|
Prepaid Rent |
20,000 |
25,000 |
1997 Net Sales = $300,000
1997 COGS = $240,000
1997 Rent Expense = $24,000
Cash Collections from Customers
|
Net Sales |
300,000 |
|
+ Change in AR |
19,000 |
|
319,000 |
Cash Payments to Suppliers
|
COGS |
240,000 |
|
+ Change in Inv |
+ 8,000 |
|
+ Change in AP |
+ 6,000 |
|
254,000 |
Cash Payments for Rent
|
PREPAID RENT |
|
Cash Payments in Advance |
Rent Expense |
|
Rent Expense |
24,000 |
|
+ Change in Prepaid Rent |
+ 5,000 |
|
29,000 |
Example:
|
1/1/97 |
12/31/97 |
|
Equipment |
150,000 |
190,000 |
|
Accumulated Depreciation |
80,000 |
85,000 |
During 1997 Equipment costing $30,000 (with a book value of $15,000) was sold. The gain as a result of this sale was $6,000.
How much was the 1997 Depreciation Expense?
|
ACCUMULATED DEPRECIATION |
|
AD on Equip Sold |
Dep Exp |
|
Change = 5,000 |
Depreciation Expense > AD sold by $5,000
|
Equipment |
30,000 |
|
- Book Value |
- 15,000 |
|
AD |
15,000 |
How much equipment was purchased during 1997?
|
EQUIPMENT |
|
Purchases |
Cost of Equip Sold |
|
Change = 40,000 |
|
Page 1219, Exercise 2
Cash Collected from Customers
|
Sales |
6,500,000 |
|
- AR |
- 350,000 |
|
6,150,000 |
Cash Paid to Suppliers
|
COGS |
3,800,000 |
|
- Inv |
- 90,000 |
|
Purchases |
3,710,000 |
|
- AP |
- 120,000 |
|
3,590,000 |
Cash Paid for Income Taxes
|
INCOME TAXES PAYABLE |
|
IT Payments |
IT Expense |
IT Expense > IT Payments by $10,000
|
IT Expense |
200,000 |
|
- IT Payments |
- 10,000 |
|
190,000 |
|
PREPAID EXPENSES |
|
Cash Payments |
Exp Recognition |
|
Change = 40,000 |
|
Payments > Expenses by $40,000
|
ACCRUED LIABILITIES |
|
Cash Payments |
Exp Recognition |
|
Change = 20,000 |
|
Payments > Expenses by $20,000
Cash Payments for Operating Expenses
|
Operating Expenses |
1,900,000 |
|
- Depreciation Expense |
- 410,000 |
|
+ Change in Prepaid Exp |
+ 40,000 |
|
+ Change in Accrued Liab |
+ 20,000 |
|
1,550,000 |
|
