Need help with Accounting Lesson 19 Part A B C

timer Asked: Oct 12th, 2015
account_balance_wallet $10

Question description

The following information is given for Tripp Company, which uses the indirect method.

Net income $20,000

Depreciation expense 3,000

Increase in accounts receivable 2,000

Payment of dividends 2,000

Proceeds from sale of equipment 6,000

Increase in accounts payable 4,000

Decrease in inventory 3,000

From the information provided, answer the following questions:

1. The cash flow from the operating activities is______

2. The cash flow from investing activities is ______

3. The cash flow from financing activities is ______

Part B

Select data for Stick's Design are given as of December 31, Year 1 and Year 2 (rounded to the nearest hundredth).

Year 2 Year 1

Net Sales

25,000  30,000

Cost of Good sold

16,000 18,000

Net Income

2,000  2,800


5,000  900

Accounts Receivable

3,000  2,000


2,000  3,600

Current Liabilities

6,000  5,000

Compare the following

1. Current ratio for year 2

2. Acid test ratio for year 2

3. Accounts receivable turnover for year 2

4. Average collection period for year 2

5. Inventory turnover for year 2

Part C

Prepare an income statement showing departmental contribution margin based on the following.

Dept X  Dept Y Rent Exp

Space (sq ft) 17,500 (X)

Rent Expense 35,000

Net Sale $60,000 (X)

Net sales $40,000 (Y)

Cost of Goods Sold $18,000(X)

Cost of Good Sold Rent Exp $16,000

Rent expense (allocated based on square feet) $2700

Part D

From the following transactions, prepare the appropriate general journal entries for the month of April.

1. Raw materials costing $60,000 were issued from the storeroom.

2. Direct labor of $53,000 was charged to production.

3. Indirect labor cost of $17,000 were incurred.

4. Overhead was applied at the rate of 40% of direct labor dollars.

5. Completed products costing $42,000 were transferred to finished goods.

6. Products costing $32,000 were sold.

Tutor Answer

Purdue University

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