Question

frontier rare coins income statement

meworkld-5558369438questionid=18flushed=false&cid=58815558centerwinayes Homework Assignment 1 of 1 (1 complete) 0 More Info B Add a. On January 1, 2018, FRC issued no par common stock for $500,000. b. Early in January, FRC made the following cash payments: 1. For store fixtures, $46,000 2. For merchandise inventory, $260,000 3. For rent expense on a store building, $13,000 C. Later in the year, FRC purchased merchandise inventory on account for $241,000. Before year-end, FRC paid $141,000 of this accounts payable. d. During 2018, FRC sold 2,900 units of merchandise inventory for $400 each. Before year-end, the company collected 95% of this amount. Cost of goods sold for the year was $310,000, and ending merchandise inventory totaled $191,000. e. The store employs three people. The combined annual payroll is $92,000, of which FRC still owes $4,000 at year-end. f. At the end of the year, FRC paid income tax of $22,000. There are no income taxes payable. Late in 2018, FRC paid cash dividends of $43,000 h. For store fixtures, FRC uses the straight-line depreciation method, over five years, with zero residual value. fields Print Done

Answer 1

38 1) What is the purpose of the Statement of Cash Flows? 39 The purpose of the statement of cash flows is to show where cash came from and how cash was 40 spent during the period. 41 42 43 Frontier Rare Coins 44 Income Statement Year Ended December 31,2018 45 46 Revenues Sales Revenue (2900*400) 1,160,000 47 48 Expenses; Cost of Goods Sold 49 310,000 Rent expense 13,000 50 Salaries expense 92,000 51 Depreciation expense (46000-0)/5 52 9,200 Income Tax expense 53 22,000 Total Expenses 446,200 54 55 Net Income 713,800 56 57 58