Question

please answer all parts to the question

Question 2 (35 points) Selected financial statement information for Johnston Enterprises is presented below. Balance Sheet Data December 31, December 31, 2013 2014 Cash $104,000 $100,000 Accounts Receivable 306,000 228,000 Prepaid Rent 15,000 43,000 Inventory 340,000 391,000 Property, Plant, and Equipment 1,122,000 1,261,000 Less: Accumulated Depreciation (442,000) (476,000) Total Assets $1,445,000 $1,547,000 Unearned Revenue 77,000 85,000 Accounts Payable (merchandise suppliers) $102,000 $187,000 Rent Payable 68,000 51,000 Bank Loan 391,000 350,000 Common Stock Retained Earnings Total Liabilities & Stockholders' Equity 467,000 340,000 $1,445,000 510,000 364,000 $1.547.000 Income Statement Data for Calendar Year 2014 1,615,000 (781,000) 834,000 Sales Revenue Cost of Goods Sold Gross Profit Expenses: Depreciation Expense Salaries Expense Interest Expense Rent Expense Loss on Sale of Equipment Net Income (153,000) (391,000) (34,000) (98,000) (12.000) $146,000 Based on the information provided above, provide your answers to the questions below in the space provided. For partial credit, please show intermediate steps. a) What was the amount of dividends declared and paid by Johnston during 2014? (5 points) 3

Answer 1

Answer: a ) Caculation of Dividend Declared during 2014 Begining Retained Earnings Add: Net Income for 2014 Less: Ending Retained earnings Divdends Declared $ $ $ $ 3,40,000 1,46,000 3,64,000 1,22,000 b) Cash Collected From Customers during 2014 Sales Revenue Add: Decrease in Account Receivables Less: begining Unearned Revenue Add: Ending Unearned Revenue Cash Collected from Customers $ 16,15,000 $ 78,000 $ 16,93,000 $ 77,000 $ 85,000 $ 17,01,000 c) Amount of Rent paid during 2014 Rent Expenses Less: Prepaid rent at end of 2013 Add: Prepaid Rent at end of 2014 Add: Rent Paayble at end of 2013 Less: Rent Payable at end 2014 Rent Paid During 2014 $ $ $ $ $ $ 98,000 15,000 43,000 68,000 51,000 1,43,000 d) Purchases during 2014 Cost of Goods Sold Add: Ending Inventory Less: Begining Inventory Purchases $ $ $ $ 7,81,000 3,91,000 3,40,000 8,32,000 Amount Paid to merchandise Supplies Purchases Add: Begining Account Payable Less: Ending Account Payable Amount Paid to merchandise Supplies $ $ $ $ 8,32,000 1,02,000 1,87,000 7,47,000