Question
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
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:
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 $46,500, 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 nonsales-related short-term note payable. e. Paid $47,500 cash to reduce the long-term notes payable. f. Issued 2,400 shares of common stock for $20 cash per share. g. Net income and dividends were the only items that affected retained earnings. QUESTION: What is the amount of dividends declared and distributed in 2013?
a) | $180,350 | |
b) | $8,375 | |
c) | $61,875 | |
d) | $56,600 | |
e) | $70,250 |
PLEASE I NEED THE CORRECT ANSWER ASAP!!! SHOW PROCESS SO I CAN UNDERSTAND HOW TO DO IT. THANK YOU! I submitted two images: balance sheet and income statement. I need it ASAP so please help me out and answer as soon as you can. THANK YOU!
SPIRIT COMPANY Comparative Balance Sheet December 31, 2013 and 2012 2013 2012 Assets Cash Accounts receivable Merchandise inventory Prepaid expenses Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts pavable Short-term notes pavable Long-term notes payable Common stock, S5 par value Paid-in capital in excess of par, commoin $49,200 $ 73,500 51,000 276,000 252,500 1,600 159,000 106,500 (31,000) (40,000) $520,030 $445,100 65,830 1,000 S58,555 $ 112,000 7,000 48,500 162,750 150,750 9,000 65,000 36,000 stock Retained earnings Total liabilities and equity 188,725126,850 S520,030 $445,100 SPIRIT COMPANY Income Statement For Year Ended December 31, 2013 Sales Cost of goods sold Gross profit Operating expenses $584,000 283,000 301,000 S 20,000 Depreciation expense Other expenses ther gains (losses) Loss on sale of equipment 132,400 152,400 Income before taxes Income taxes expense Net income 5,875 $142,725 24,250 $118,475Step by Step Solution
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