Accounting Case Discussion I

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We've finished learning two chapters. It's time to test your abilities and skills to analyze a company's financial data and prepare the statement of Cash flow. As the instructor, I will facilitate student discussions but I will not address every single post. In most cases, I might share a related idea, intervene when the discussion goes off-track, or tie student comments together to help deepen student learning.

Theme: 1. explain the purpose and format of the statement of cash flows. Also, describe its use to decision makers.

2. review below Spirit company's financial data and apply what you've learned for preparing statement of cash flow and calculate the net cash flows provided (used) by financing activities. Don't hesitate to discuss your thoughts and results with others.

Spirit Company, a merchandiser, recently completed its 2013 calendar year. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheet and income statement follow:

Grading guidelines:

• Your response must contain some reference back to the original discussion questions. Stay on track by always referring back to that original discussion questions.
• You must post at least two times to get the maximum number of points for your participation. The first posting should include your research results of the purpose and format of cash flow. The second posting should have the specific amount of cash provided or used by financing activities.
• Make sure your posting is at least 50-120 words.
• Post and responses should be thorough and thoughtful. "I agree" or "Good ideas" will not be considered adequate.
• Accounting Case Discussion is worth 10 points. It will be due on Sunday @11:59pm.
• No late post will be graded.

Canvas student guide-Discussion

Spirit Company, a merchandiser, recently completed its 2013 calendar year. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheet and income statement follow:

Q7) Home X /courses/31931/assignments/299528/submissions/9731 CTY Leases Assignments > Accounting Case Discussion I > mission Details unting Case Discussion Add payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheet and income statement follow: SPIRIT COMPANY Comparative Balance Sheet December 31, 2013 and 2012 2013 2012 Sau $49.200 S 73.500 65,830 51,000 276,000 252,500 1,000 1,600 159,000 106,500 (31,000 (40,000) S520.030... $445.100 Assets Cash Accounts receivable Merchandise inventory Prepaid expenses Equipment Accum. depreciation Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Long-term notes payable Common stock, S5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 58.555. S 112.000 9,000 7,000 65,000 48,500 162,750 150,750 36,000 0 188,725 126,850 $320.030 5445.100 SPIRIT COMPANY Income Statement For Year Ended December 31, 2013 MacBook Air ssignments > Accounting Case Discussion> nission Details unting Case Discussion 1 Add $584.000 283,000 301,000 SPIRIT COMPANY Income Statement For Year Ended December 31, 2013 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 20,000 Other expenses 132,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income M 152,400 Sav 5,875 $142.725 24,250 S18.475 Additional information on year 2013 transactions: a. The loss on the cash sale of equipment was $5,875 (details in b). b. Sold equipment costing 546,500, for a loss of $5,875. c. Purchased equipment costing $99,000 by paying $35,000 cash and signing a long-term note payable for the balance. d. Borrowed $2,000 cash by signing a non-sales related short-term note payable. e. Paid $47,500 cash to reduce the long-term notes payable. 1. Issued 2,400 shares of common stock for $20 cash per share. 8. Net income and dividends were the only items that affected retained earnings. Grading guidelines: Your response must contain some reference back to the original discussion questions. Stay on track by always referring back to that MacBook Air signments > Accounting Case Discussion> nission Details unting Case Discussion I Add ac Med Save Grading guidelines: . Your response must contain some reference back to the original discussion questions. Stay on track by always referring back to that original discussion questions. You must post at least two times to get the maximum number of points for your participation. The first posting should include your research results of the purpose and format of cash flow. The second posting should have the specific amount of cash provided or used by financing activities. Make sure your posting is at least 50-120 words. Post and responses should be thorough and thoughtful. "I agree" or "Good ideas" will not be considered adequate. Accounting Case Discussion is worth 10 points. It will be due on Sunday @11:59pm. No late post will be graded. Canvas student guide-Discussion MacBook Air Q7) Home X /courses/31931/assignments/299528/submissions/9731 CTY Leases Assignments > Accounting Case Discussion I > mission Details unting Case Discussion Add payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheet and income statement follow: SPIRIT COMPANY Comparative Balance Sheet December 31, 2013 and 2012 2013 2012 Sau $49.200 S 73.500 65,830 51,000 276,000 252,500 1,000 1,600 159,000 106,500 (31,000 (40,000) S520.030... $445.100 Assets Cash Accounts receivable Merchandise inventory Prepaid expenses Equipment Accum. depreciation Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Long-term notes payable Common stock, S5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 58.555. S 112.000 9,000 7,000 65,000 48,500 162,750 150,750 36,000 0 188,725 126,850 $320.030 5445.100 SPIRIT COMPANY Income Statement For Year Ended December 31, 2013 MacBook Air Q7) Home X /courses/31931/assignments/299528/submissions/9731 CTY Leases Assignments > Accounting Case Discussion I > mission Details unting Case Discussion Add payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheet and income statement follow: SPIRIT COMPANY Comparative Balance Sheet December 31, 2013 and 2012 2013 2012 Sau $49.200 S 73.500 65,830 51,000 276,000 252,500 1,000 1,600 159,000 106,500 (31,000 (40,000) S520.030... $445.100 Assets Cash Accounts receivable Merchandise inventory Prepaid expenses Equipment Accum. depreciation Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Long-term notes payable Common stock, S5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 58.555. S 112.000 9,000 7,000 65,000 48,500 162,750 150,750 36,000 0 188,725 126,850 $320.030 5445.100 SPIRIT COMPANY Income Statement For Year Ended December 31, 2013 MacBook Air ssignments > Accounting Case Discussion> nission Details unting Case Discussion 1 Add $584.000 283,000 301,000 SPIRIT COMPANY Income Statement For Year Ended December 31, 2013 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 20,000 Other expenses 132,400 Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income M 152,400 Sav 5,875 $142.725 24,250 S18.475 Additional information on year 2013 transactions: a. The loss on the cash sale of equipment was $5,875 (details in b). b. Sold equipment costing 546,500, for a loss of $5,875. c. Purchased equipment costing $99,000 by paying $35,000 cash and signing a long-term note payable for the balance. d. Borrowed $2,000 cash by signing a non-sales related short-term note payable. e. Paid $47,500 cash to reduce the long-term notes payable. 1. Issued 2,400 shares of common stock for $20 cash per share. 8. Net income and dividends were the only items that affected retained earnings. Grading guidelines: Your response must contain some reference back to the original discussion questions. Stay on track by always referring back to that MacBook Air signments > Accounting Case Discussion> nission Details unting Case Discussion I Add ac Med Save Grading guidelines: . Your response must contain some reference back to the original discussion questions. Stay on track by always referring back to that original discussion questions. You must post at least two times to get the maximum number of points for your participation. The first posting should include your research results of the purpose and format of cash flow. The second posting should have the specific amount of cash provided or used by financing activities. Make sure your posting is at least 50-120 words. Post and responses should be thorough and thoughtful. "I agree" or "Good ideas" will not be considered adequate. Accounting Case Discussion is worth 10 points. It will be due on Sunday @11:59pm. No late post will be graded. Canvas student guide-Discussion MacBook Air Q7) Home X /courses/31931/assignments/299528/submissions/9731 CTY Leases Assignments > Accounting Case Discussion I > mission Details unting Case Discussion Add payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheet and income statement follow: SPIRIT COMPANY Comparative Balance Sheet December 31, 2013 and 2012 2013 2012 Sau $49.200 S 73.500 65,830 51,000 276,000 252,500 1,000 1,600 159,000 106,500 (31,000 (40,000) S520.030... $445.100 Assets Cash Accounts receivable Merchandise inventory Prepaid expenses Equipment Accum. depreciation Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Long-term notes payable Common stock, S5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 58.555. S 112.000 9,000 7,000 65,000 48,500 162,750 150,750 36,000 0 188,725 126,850 $320.030 5445.100 SPIRIT COMPANY Income Statement For Year Ended December 31, 2013 MacBook Air