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Solutions Chapter 1 – Set B Exercises – Libby 7e
E1-1B.
Sunoco Inc.
Balance Sheet
For the Period ending December 31, 2009
(in millions of dollars)
Assets
Cash and cash equivalents
Trade accounts, notes, and other receivables
Inventories
Investments
Net property, plant and equipment
Other assets
Total assets
Liabilities
Accounts payable and other current liabilities
Long-term debt
Other liabilities
Total liabilities
Stockholders’ Equity
Contributed capital
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity
$
377
2,262
635
179
7,626
816
$11,895
$ 3,322
2,061
3,393
8,776
1,984
1,135
3,119
$11,895
E1-2B.
UNIVERSITY MARKET
Income Statement
For the Month of March 2011
Revenues:
Sales: Cash
On credit
Total sales revenue
Expenses:
Cost of goods sold
Salaries, rent, supplies, and other
expenses (paid in cash)
Utilities
Total expenses
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$150,000
5,000
$155,000
60,000
32,000
1,100
93,100
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Net Income
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$61,900
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E1–3B.
Net Income (or Loss) = Revenues - Expenses
Assets = Liabilities + Stockholders’ Equity
A
Net Income = $89,700 - $73,940 = $15,760;
Stockholders’ Equity = $134,200 - $59,000 = $75,200.
B
Total Revenues = $70,240 + $18,740 = $88,980;
Total Liabilities = $100,880 - $90,010 = $10,870.
C
Net Loss = $66,260 - $86,430 = ($20,170);
Stockholders’ Equity = $99,850 - $60,850 = $39,000.
D
Total Expenses = $68,680 - $41,770 = $26,910;
Total Assets = $27,890 + $88,680 = $116,570.
E
Net Income = $88,840 - $75,720 = $13,120;
Total Assets = $35,520 + $77,580 = $113,100.
E1–4B.
Net Income (or Loss) = Revenues - Expenses
Assets = Liabilities + Stockholders’ Equity
A
Net Income = $230,820 - $176,700 = $54,120;
Stockholders’ Equity = $295,300 - $95,000 = $200,300.
B
Total Revenues = $165,780 + $32,920 = $198,700;
Total Liabilities = $580,000 - $358,400 = $221,600.
C
Net Loss = $70,990 - $89,890 = ($18,900);
Stockholders’ Equity = $268,200 - $195,760 = $72,440.
D
Total Expenses = $43,590 - $11,840 = $31,750;
Total Assets = $198,675 + $99,525 = $298,200.
E
Net Income = $220,130 - $210,600= $9,530;
Total Assets = $193,850 + $316,240 = $510,090.
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E1–5B.
XTREME MANUFACTURING CORPORATION
Statement of Cash Flows
For the Year Ended December 31, 2011
Cash flow from operating activities
Cash collections from sales
$260,000
Cash paid for operating expenses
(195,000)
Net cash flow from operating activities
$65,000
Cash flow from investing activities
Sale of land
35,000
Purchase of new machines
(39,000)
Net cash flow from investing activities
(4,000)
Cash flow from financing activities
Sale of capital stock
45,000
Payment on long-term notes
(75,000)
Payment of cash dividends
(28,000)
Net cash flow from financing activities
(58,000)
Net increase in cash
3,000
Cash at beginning of year
60,000
Cash at end of year
$ 63,000
E1–6B.
BARBARA’S DESIGN CORPORATION
Statement of Retained Earnings
For the Year Ended December 31, 2012
Beginning retained earnings*
Net income
Dividends
Ending retained earnings
$23,800
40,000
19,700
$44,100
* Beginning retained earnings + Net income – Dividends = Ending retained earnings
For 2011: $0 + 39,000 – 15,200 = $23,800;
Ending retained earnings for 2011 becomes beginning retained earnings for 2012
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E1-7B.
FABULOUS STYLES
Income Statement
For the Month of March 2011
Revenues:
Sales: Cash
On credit
Total sales revenue
Expenses:
Cost of goods sold
Salaries, rent, supplies, and other
expenses (paid in cash)
Utilities
Total expenses
Net Income
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$180,000
4,000
$184,000
90,000
22,000
1,000
113,000
$71,000
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E1–8B.
Net Income (or Loss) = Revenues - Expenses
Assets = Liabilities + Stockholders’ Equity
A
Net Income = $91,700 - $75,940 = $15,760;
Stockholders’ Equity = $136,200 - $61,000 = $75,200.
B
Total Revenues = $85,240 + $33,740 = $118,980;
Total Liabilities = $115,880 - $105,010 = $10,870.
C
Net Loss = $33,260 - $86,430 = ($53,170);
Stockholders’ Equity = $98,850 - $62,850 = $36,000.
D
Total Expenses = $81,680 - $41,770 = $39,910;
Total Assets = $27,800 + $88,680 = $116,480.
E
Net Income = $81,840 - $75,720 = $6,120;
Total Assets = $35,500 + $77,500 = $113,000.
E1–9B.
Net Income (or Loss) = Revenues - Expenses
Assets = Liabilities + Stockholders’ Equity
A
Net Income = $240,820 - $176,700 = $64,120;
Stockholders’ Equity = $295,000 - $95,000 = $200,000.
B
Total Revenues = $165,700 + $32,020 = $197,720;
Total Liabilities = $585,000 - $365,400 = $219,600.
C
Net Loss = $67,990 - $89,890 = ($21,900);
Stockholders’ Equity = $288,200 - $195,760 = $92,440.
D
Total Expenses = $43,590 - $15,840 = $27,750;
Total Assets = $218,675 + $99,525 = $318,200.
E
Net Income = $225,130 - $210,600= $14,530;
Total Assets = $195,800 + $316,200 = $512,000.
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E1–10B.
XTREME MANUFACTURING CORPORATION
Statement of Cash Flows
For the Year Ended December 31, 2011
Cash flow from operating activities
Cash collections from sales
$275,000
Cash paid for operating expenses
(198,000)
Net cash flow from operating activities
$77,000
Cash flow from investing activities
Sale of land
23,000
Purchase of new machines
(38,750)
Net cash flow from investing activities
(15,750)
Cash flow from financing activities
Sale of capital stock
42,500
Payment on long-term notes
(78,000)
Payment of cash dividends
(26,650)
Net cash flow from financing activities
(62,150)
Net decrease in cash
(900)
Cash at beginning of year
56,000
Cash at end of year
$ 55,100
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