Question 1 - Presented below is information related to Riverbed Company at December 31, 2017, the end of its first year of operations.
|
Sales revenue
|
$327,980
|
|
Cost of goods sold
|
148,580
|
|
Selling and administrative expenses
|
52,100
|
|
Gain on sale of plant assets
|
30,840
|
|
Unrealized gain on available-for-sale investments
|
9,370
|
|
Interest expense
|
6,060
|
|
Loss on discontinued operations
|
11,970
|
|
Dividends declared and paid
|
5,190
|
Compute the following:
(a) Income from operations
(b) Net income
(c) Comprehensive income
(d) Retained earnings balance at December 31, 2017
Question 2 - Sunland Company has recorded bad debt expense in the past at a rate of 1.5% of accounts receivable, based on an aging analysis. In 2017, Sunland decides to increase its estimate to 2%. If the new rate had been used in prior years, cumulative bad debt expense would have been $396,400 instead of $298,700. In 2017, bad debt expense will be $126,900 instead of $96,360. If Sunland's tax rate is 26%, what amount should it report as the cumulative effect of changing the estimated bad debt rate?
Question 3 - Presented below are changes in the account balances of Wenn Company during the year, except for retained earnings.
|
Increase
(Decrease)
|
|
Increase
(Decrease)
|
|
Cash
|
$28,340
|
Accounts payable
|
$34,860
|
|
Accounts receivable (net)
|
(18,090)
|
Bonds payable
|
(20,670)
|
|
Inventory
|
52,060
|
Common stock
|
63,250
|
|
Plant assets (net)
|
46,180
|
Paid-in capital
|
15,960
|
The only entries in Retained Earnings were for net income and a dividend declaration of $16,400.
(a) Compute the net income for the current year.
Question 4 - The Sheffield, Inc. sold 10,630 season tickets at $2,000 each. By December 31, 2017, 16 of the 40 home games had been played. What amount should be reported as a current liability at December 31, 2017?
Question 5 - Cullumber Corporation's adjusted trial balance contained the following asset accounts at December 31, 2017: Cash $9,680, Land $45,100, Patents $14,600, Accounts Receivable $97,740, Prepaid Insurance $6,110, Inventory $37,000, Allowance for Doubtful Accounts $5,700, and Equity Investments (to be sold in the next quarter) $14,360.
Prepare the current assets section of the balance sheet.