Benson Company uses a periodic inventory system and presents the following items derived from its December 31, 2017, adjusted trial balance:
Operating Expenses |
$ 39,830 |
Dividend Revenue |
1,200 |
Retained Earnings, January 1, 2017 |
77,550 |
Sales (net) |
235,650 |
Common Stock, $10 par |
50,000 |
Merchandise Inventory, January 1, 2017 |
26,400 |
Purchases (net) |
81,720 |
Balance sheet information | ||
Assets | 12/31/18 | 12/31/17 |
Cash | $20,000 | $ 38,000 |
Accounts receivable | 83,000 | 70,000 |
Inventory | 90,000 | 85,000 |
Prepaid Insurance | 2,000 | 1,700 |
Equipment | 40,000 | 25,000 |
Less: Accumulated depreciation | (700) | (500) |
Total assets | $234,300 | $219,200 |
Liabilities and Stockholders' Equity | ||
Accounts Payable | $30,000 | $36,000 |
Income taxes payable | 20,000 | 15,000 |
Common stock | 100,000 | 100,000 |
Retained earnings | 84,300 | 68,200 |
Total liabilities and stockholders' equity | $234,300 | $219,200 |
The following information is also available for 2017 and is not reflected in the preceding accounts:
Benson Company
INCOME STATEMENT
For the year ended December 31,2017
Particulars Amount($)
Sales revenue 235,650
Cost of goods sold (78,090)
Gross Profit 157,560
Operating Expenses:
Total Operating Exp. (39,830)
Operating Income
Other items:
Dividend Revenue 1200
Loss on write off of
damaged inventory (7620)
Lost from earthquake (4700) (11120)
Pretax income from continuing operations 106,610
Income tax expense (106,610 * 30%) (31,983)
Income from continuing operations 74,627
Results from discontinued operations:
Income from operations of discontinued
Division E (net of income taxes) 2030
Loss on disposal of Division E (net of income
taxes) (2940)
Net income 73,717
Components of Income Earnings per common share(# per share)
Net income 14.74 (73717 / 5000)
Profit margin on sales ratio 66.86% ((157560 / 235650) * 100)
Benson Company
Statement of Cash Flows
For the year ended December 31st, 2017.
Amount($)
Cash Flows from Operating Activities
Net Income 73,717
Adjustment for non cash effect:
Depreciation expense 200
Changes in current assets and current liabilities:
Increase in accounts receivable (7000)
Increase in inventory (5000)
Increase in prepaid insurance (300)
Decrease in accounts payable (6000)
Increase in income taxes payable 5000
Net Cash flows for operating operating activities 60617
Cash Flows from Investing Activities
Purchase of equipment (15500) (25000 - 500 - 40000)
Net Cash flows for operating investing activities (15500)
Cash Flows from Financing Activities
Payment of dividends (9200) (10000 * 0.92)
Net Cash flows for operating investing activities (9200)
Net increase in cash 35917
Beginning Cash Balance 38000
Ending cash balance 20000
Difference in cash 53,917
Benson Company uses a periodic inventory system and presents the following items derived from its December...
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