Chapter 1: Q27DQ (page 29)
The statement of cash flows reports on what major activities?
Statement of cash flow shows the movement of cash throughout the business and the activities reported are operating, investing, and financing activities.
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Use the information in Exercise 1-15 to prepare an October 31 balance sheet for Ernst Consulting. Hint: The solution to Exercise 1-16 can help.
Question: Identify three types of services typically offered by accounting professionals.
Kyzera manufactures, markets, and sells cellular telephones. The average total assets for Kyzera is \(250,000. In its most recent year, Kyzera reported net income of \)65,000 on revenues of $475,000.
Required 1. What is Kyzera’s return on assets?
Kyzera manufactures, markets, and sells cellular telephones. The average total assets for Kyzera is \(250,000. In its most recent year, Kyzera reported net income of \)65,000 on revenues of $475,000.
Required 3. What are total expenses for Kyzera in its most recent year?
Rivera Roofing Company, owned by Reyna Rivera, began operations in July and completed these transactions during that first month of operations.
July 1 Reyna Rivera invested \(80,000 cash in the company in exchange for its common stock.
2 The company rented office space and paid \)700 cash for the July rent.
3 The company purchased roofing equipment for \(5,000 by paying \)1,000 cash and agreeing to pay the \(4,000 balance in 30 days.
6 The company purchased office supplies for \)600 cash.
8 The company completed work for a customer and immediately collected \(7,600 cash for the work.
10 The company purchased \)2,300 of office equipment on credit.
15 The company completed work for a customer on credit in the amount of \(8,200.
17 The company purchased \)3,100 of office supplies on credit.
23 The company paid \(2,300 cash for the office equipment purchased on July 10.
25 The company billed a customer \)5,000 for work completed; the balance is due in 30 days.
28 The company received \(8,200 cash for the work completed on July 15.
30 The company paid an assistant’s salary of \)1,560 cash for this month.
31 The company paid \(295 cash for this month’s utility bill.
31 The company paid \)1,800 cash in dividends to the owner (sole shareholder).
Required Analysis Component 4. Assume that the \(5,000 purchase of roofing equipment on July 3 was financed from an owner investment of another \)5,000 cash in the business in exchange for more common stock (instead of the purchase conditions described in the transaction above). Compute the dollar effect of this change on the month-end amounts for (a) total assets, (b) total liabilities, and (c) total equity.
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