AC113 4-1, 4-6 and 4-7.

4-1 1. Net income, $775,000 The following selected accounts and their current balances appear in the ledger of Aqua Co. for the fiscal year ended June 30, 2013: Cash $ 83,500 Sales $3,625,000 Accounts Receivable 150,000 Sales Returns and Allowances 37,800 Merchandise Inventory 380,000 Sales Discounts 20,200 Office Supplies 15,000 Cost of Merchandise Sold 2,175,000 Prepaid Insurance 12,000 Sales Salaries Expense 388,800 Office Equipment 115,200 Advertising Expense 45,900 Accumulated DepreciationOffice Equipment 49,500 Depreciation ExpenseStore Equipment 8,300 Store Equipment 511,500 Miscellaneous Selling Expense 2,000 Accumulated DepreciationStore Equipment 186,700 Office Salaries Expense 77,400 Rent Expense 39,900 Accounts Payable 48,600 Insurance Expense 22,950 Salaries Payable 9,600 Depreciation ExpenseOffice Equipment 16,200 Note Payable (final payment due 2025) 54,000 Office Supplies Expense 1,650 Capital Stock 15,000 Miscellaneous Administrative Expense 1,900 Retained Earnings 253,800 Dividends 125,000 Interest Expense 12,000 Instructions 1. Prepare a multiple-step income statement. 2. Prepare a retained earnings statement. 3. Prepare a report form of balance sheet, assuming that the current portion of the note payable is $8,000. 4. Briefly explain (a) how multiple-step and single-step income statements differ and (b) how report-form and account-form balance sheets differ.

4-6 Statement of cash flows using indirect method 1. Net cash flows from operating activities: $98,605 For the year ending March 31, 2013, Omega Systems Inc. reported net income of $105,450 and paid dividends of $7,500. Comparative balance sheets as of March 31, 2013 and 2012, are as follows: Instructions 1. Prepare a statement of cash flows, using the indirect method. 2. Why is depreciation added to net income in determining net cash flows from operating activities? Explain.

Exercise 4-1 a. b. c. Show your work. Exercise 4-6 a. b. Show your work. Exercise 4-7 1. 2. 3. 4. 5. 6. 7. 8