5.Constructing Financial Statements from Account Data

Barth Company reports the following year-end account balances at December 31, 2011. Prepare the 2011 income statement and the balance sheet as of December 31, 2011.

Accounts payable	$ 32,000	Inventory	$ 72,000
Accounts receivable	60,000	Land	160,000
Bonds payable, long-term	400,000	Goodwill	16,000
Buildings	302,000	Retained earnings	120,000
Cash	96,000	Sales revenue	800,000
Common stock	300,000	Supplies inventory	6,000
Cost of goods sold	360,000	Supplies expense	12,000
Equipment	140,000	Wages expense	80,000

Barth Company Income Statement For Year Ended December 31, 2011
AnswerAccounts payableAccounts receivableBonds payableBuildingsCashCommon stockCost of goods soldEquipmentInventoryLandGoodwillRetained earningsSales revenueSupplies inventorySupplies expenseWages expense		$Answer
Expenses
AnswerAccounts payableAccounts receivableCost of goods soldRetained earningsSales revenue	Answer
AnswerLandGoodwillBonds payableCommon stockWages expense	Answer
AnswerBuildingsEquipmentInventorySupplies inventorySupplies expense	Answer
Total expenses		Answer
Net income		$Answer

Barth Company Balance Sheet

December 31, 2011

Assets
Cash	$Answer
AnswerAccounts payableAccounts receivable	Answer
AnswerSupplies inventorySupplies expense	Answer
AnswerCost of goods soldInventory	Answer
Total current assets	Answer
AnswerCommon stockLand	Answer
AnswerEquipmentRetained earnings	Answer
AnswerBuildingsSales revenue	Answer
AnswerGoodwillWages expense	Answer
Total assets	$Answer

6

Applying Financial Statement Linkages to Understand Transactions Consider the effects of the independent transactions, a through g, on a company's balance sheet, income statement, and statement of cash flows. Complete the table below to explain the effects and financial statement linkages. Refer to Exhibit 2.10 as a guide for the linkages. a. The company issued common stock in exhange for cash and property and equipment. b. The company paid cash for rent of office furnishings and facilities. c. The company performed services for clients and immediately received cash earned. d. The company performed services for clients and sent a bill with payment due within 60 days. e. The company compensated an office employee with cash as salary. f. The company received cash as partial payment on the amount owed from clients in transaction d. g. The company paid cash in dividends. To indicate the account increases (+), enter "1" in the answer box. To indicate the account decreases (-), enter "2" in the answer box. Leave other answers boxes blank, if the account is not impacted by the transaction.

	a.	b.	c.	d.	e.	f.	g.
Balance sheet
Cash	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Noncash assets	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Total liabilities	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Contributed capital	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Retained earnings	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Other equity	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Statement of cash flows
Operating cash flow	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Investing cash flow	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Financing cash flow	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Income statement
Revenues	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Expenses	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Net income	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Statement of stockholders' equity
Contributed capital	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Retained earnings	Answer	Answer	Answer	Answer	Answer	Answer	Answer

7.

Applying Financial Statement Linkages to Understand Transactions Consider the effects of the independent transactions, a through g, on a company's balance sheet, income statement, and statement of cash flows. Complete the table below to explain the effects and financial statement linkages. Refer to Exhibit 2.10 as a guide for the linkages. a. Owners invested cash in the company in exchange for shares of common stock. b. The company received cash from the bank for a loan. c. The company purchased equipment to manufacture goods for sale and paid with cash. d. The company manufactured a custom piece of inventory and paid cash for materials and labor. The company sold the inventory for more than cost, and the customer promised to pay for the inventory in 30 days. e. The company paid monthly rent for a manufacturing space. f. The company paid $935 cash in dividends to the owners. g. The company received cash from the customer in transaction d. To indicate the account increases (+), enter "1" in the answer box. To indicate the account decreases (-), enter "2" in the answer box. Leave other answers boxes blank, if the account is not impacted by the transaction.

	a.	b.	c.	d.	e.	f.	g.
Balance sheet
Cash	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Noncash assets	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Total liabilities	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Contributed capital	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Retained earnings	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Other equity	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Statement of cash flows
Operating cash flow	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Investing cash flow	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Financing cash flow	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Income statement
Revenues	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Expenses	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Net income	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Statement of stockholders' equity
Contributed capital	Answer	Answer	Answer	Answer	Answer	Answer	Answer
Retained earnings	Answer	Answer	Answer	Answer	Answer	Answer	Answer

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Liabilities and equity
AnswerAccounts payableAccounts receivableCashCost of goods soldEquipmentInventorySupplies inventorySupplies expense	$Answer
AnswerBonds payable, long-termBuildingsCommon stockLandGoodwillRetained EarningSales revenueWage expenses	Answer
Total liabilities	Answer
AnswerAccounts payableAccounts receivableBonds payableBuildingsCashCommon stockCost of goods soldEquipment	Answer
AnswerInventoryLandGoodwillSupplies inventoryRetained EarningsSales revenueSupplies inventorySupplies expenseWages expense	Answer
Total equity	Answer
Total liabilities and equity	$Answer