Chapter 1 Set B Exercises Libby 7e E1-1B (similar to E 1-4).

). [LO 1 Preparing a Balance Sheet Sunoco is a major retailer and recognized brand in the sale of gasoline and convenience store items. The company follows U.S. GAAP and reports its financial statements in millions of dollars. ts recent balance sheet contained the following items !in millions". Prepare a balance sheet as of #ecember $%& '(()& solving for the missing amount. ! !i"t# *+hibit %.' in the chapter provides a good model for completing this e+ercise."
Cash and cash equivalents Contributed capital Accounts payable and other current liabilities Inventories Invest"ents #on$%ter" debt 'et property, plant, and equip"ent (ther assets (ther liabilities )etained earnin$s *otal assets *otal liabilities and stoc+holders, equity *rade accounts, notes, and other receivables $ 377 1,984 3,322 3! 179 2,& 1 7, 2 81 3,393 1,13! 11,89! 2,2 2

E 1-$B (similar to E1-%) [LO 1 &"aly'i"( )e*e"+es a", Expe"ses a", -repari"( a" ."come Stateme"t Assume that you are the owner of University ,ar-et& which specializes in items that interest students. At the end of ,arch '(%%& you find !for ,arch only" this information. a. Sales& per the cash register tapes& of /%0(&(((& plus one sale on credit !a special situation" of /0&(((. b. 1ith the help of a friend !who majored in accounting"& you determine that all of the goods sold during ,arch cost /2(&((( to purchase. c. #uring the month& according to the chec-boo-& you paid /$'&((( for salaries& rent& supplies& advertising& and other e+penses3 however& you have not yet paid the /%&%(( monthly utilities for ,arch on the store and fi+tures. Required: 4n the basis of the data given !disregard income ta+es"& what was the amount of net income for ,arch5 Show computations. ! !i"t# A convenient form to use has the following major side captions. 6evenue from Sales& *+penses& and the difference78et ncome."

E1-/B (similar to E1-0) [LO 1 Inferring Values Using the Income Statement and Balance Sheet Equations 6eview the chapter e+planations of the income statement and the balance sheet e9uations. Apply these e9uations in each independent case to compute the two missing amounts for each case. Assume that it is the end of '(%'& the first full year of operations for the company. !!i"t# 4rganize the listed items as they are presented in the balance sheet and income statement e9uations and then compute the missing amounts." .",epe",e "t Cases A = > # * 1otal )e*e"+es /:)&;(( 22&'2( 2:&2:( ::&:<( 1otal Expe"ses /;$&)<( ;(&'<( :2&<$( ;0&;'( 2et ."come (Loss) / %:&;<( <%&;;( 1otal &ssets /%$<&'(( %((&::( ))&:0( 1otal Liabilities /0)&((( 2(&:0( ';&:)( $0&0'( Stoc3hol,e rs4 E5+ity / )(&(%( ::&2:( ;;&0:(

E1-4B (similar to E1-16) [LO1 ."7erri"( 8al+es 9si"( the ."come Stateme"t a", Bala"ce Sheet E5+atio"s 6eview the chapter e+planations of the income statement and the balance sheet e9uations. Apply these e9uations in each independent case to compute the two missing amounts for each case. Assume that it is the end of '(%'& the first full year of operations for the company. !!i"t# 4rganize the listed items as they are presented in the balance sheet and income statement e9uations and then compute the missing amounts." .",epe",e "t Cases A = > # * 1otal )e*e"+es
$23&,82& 7&,99& 43,!9& 22&,13&

1otal Expe"ses
$17 ,7&& 1 !,78& 89,89& 21&, &&

2et ."come (Loss)

$ 32,92& 11,84&

1otal &ssets
$29!,3&& !8&,&&& 2 8,2&&

1otal Liabilities
$9!,&&& 19!,7 & 198, 7! 193,8!&

Stoc3hol,e rs4 E5+ity

$ 3!8,4&& 99,!2! 31 ,24&

E1-:B (similar to E1-14) [LO 1 -repari"( a Stateme"t o7 Cash ;lo<s ?T6*,* ,anufacturing >orporation is preparing the annual financial statements for the stoc-holders. A statement of cash flows must be prepared. The following data on cash flows were developed for the entire year ended #ecember $%& '(%%. cash collections from sales& /'2(&(((3 cash e+pended for operating e+penses& /%)0&(((3 sale of unissued ?T6*,* stoc- for cash& /<0&(((3 cash dividends declared and paid to stoc-holders during the year& /':&(((3 and payments on long@term notes payable& /;0&(((. #uring the year& a tract of land held as an investment was sold for /$0&((( cash !which was the same price that ?T6*,* had paid for the land in '(%("& and /$)&((( cash was e+pended for two new machines. The machines were used in the factory. The beginning@of@the@year cash balance was /2(&(((.

Required: Prepare the statement of cash flows for '(%%. Aollow the format illustrated in the chapter.

E1-%B (similar to E1-1$) [LO 1 -repari"( a Stateme"t o7 )etai"e, Ear"i"(s =arbaraBs #esign >orporation was organized on Canuary %& '(%%. Aor its first two years of operations& it reported the following. 8et income for '(%% 8et income for '(%' #ividends for '(%% #ividends for '(%' Total assets at the end of '(%% Total assets at the end of '(%' / $)&((( <(&((( %0&'(( %)&;(( %0(&((( $'(&(((

Required: 4n the basis of the data given& prepare a statement of retained earnings for '(%'. Show computations. E 1-7B (similar to E1-%) [LO 1 &"aly'i"( )e*e"+es a", Expe"ses a", -repari"( a" ."come Stateme"t Assume that you are the owner of Aabulous Styles& which specializes in clothing for teens. At the end of ,arch '(%%& you find !for ,arch only" this information. a. Sales& per the cash register tapes& of /%:(&(((& plus one sale on credit !a special situation" of /<&(((. b. 1ith the help of a friend !who majored in accounting"& you determine that all of the goods sold during ,arch cost /)(&((( to purchase. c. #uring the month& according to the chec-boo-& you paid /''&((( for salaries& rent& supplies& advertising& and other e+penses3 however& you have not yet paid the /%&((( monthly utilities for ,arch on the store and fi+tures. Required: 4n the basis of the data given !disregard income ta+es"& what was the amount of net income for ,arch5 Show computations. ! !i"t# A convenient form to use has the following major side captions. 6evenue from Sales& *+penses& and the difference78et ncome."

E1-=B (similar to E1-0) [LO 1 Inferring Values Using the Income Statement and Balance Sheet Equations 6eview the chapter e+planations of the income statement and the balance sheet e9uations. Apply these e9uations in each independent case to compute the two missing amounts for each case. Assume that it is the end of '(%'& the first full year of operations for the company. !!i"t# 4rganize the listed items as they are presented in the balance sheet and income statement e9uations and then compute the missing amounts." .",epe",e "t Cases A = > # * 1otal )e*e"+es /)%&;(( $$&'2( :%&2:( :%&:<( 1otal Expe"ses /;0&)<( :0&'<( :2&<$( ;0&;'( 2et ."come (Loss) / $$&;<( <%&;;( 1otal &ssets /%$2&'(( %%0&::( ):&:0( 1otal Liabilities /2%&((( 2'&:0( ';&:(( $0&0(( Stoc3hol,e rs4 E5+ity / %(0&(%( ::&2:( ;;&0((

E1-0B (similar to E1-16) [LO1 ."7erri"( 8al+es 9si"( the ."come Stateme"t a", Bala"ce Sheet E5+atio"s 6eview the chapter e+planations of the income statement and the balance sheet e9uations. Apply these e9uations in each independent case to compute the two missing amounts for each case. Assume that it is the end of '(%'& the first full year of operations for the company. !!i"t# 4rganize the listed items as they are presented in the balance sheet and income statement e9uations and then compute the missing amounts." .",epe",e "t Cases A = > # * 1otal )e*e"+es
$24&,82& 7,99& 43,!9& 22!,13&

1otal Expe"ses
$17 ,7&& 1 !,7&& 89,89& 21&, &&

2et ."come (Loss)

$ 32,&2& 1!,84&

1otal &ssets
$29!,&&& !8!,&&& 288,2&&

1otal Liabilities
$9!,&&& 19!,7 & 218, 7! 19!,8&&

Stoc3hol,e rs4 E5+ity

$ 3 !,4&& 99,!2! 31 ,2&&

E1-16B (similar to E1-14) [LO 1 -repari"( a Stateme"t o7 Cash ;lo<s ?T6*,* ,anufacturing >orporation is preparing the annual financial statements for the stoc-holders. A statement of cash flows must be prepared. The following data on cash flows were developed for the entire year ended #ecember $%& '(%%. cash collections from sales& /';0&(((3 cash e+pended for operating e+penses& /%):&(((3 sale of unissued ?T6*,* stoc- for cash& /<'&0((3 cash dividends declared and paid to stoc-holders during the year& /'2&20(3 and payments on long@term notes payable& /;:&(((. #uring the year& a tract of land held as an investment was sold for /'$&((( cash !which was the same price that ?T6*,* had paid for the land in '(%("& and /$:&;0( cash was e+pended for two new machines. The machines were used in the factory. The beginning@of@the@year cash balance was /02&(((.

Required: Prepare the statement of cash flows for '(%%. Aollow the format illustrated in the chapter.