The following general equation can be used to determine missing information about balance sheet accounts: Use the
Question:
The following general equation can be used to determine missing information about balance sheet accounts:
Use the equation to determine the missing information in each of the following independent situations. For each case assume that the year-end is December 31. You can also use an accounting equation spreadsheet to determine the missing information.
a. On January 1, 2013 Ewart Ltd. (Ewart) had \($450,000\) of inventory on hand. During 2013 Ewart sold \($1,520,000\) of inventory and purchased \($1,330,000\) of inventory.
How much inventory did Ewart have on December 31, 2013?
b. Peno Inc. (Peno) had \($1,500,000\) and \($1,750,000\) of accounts receivable and on January 1 and December 31, 2014 respectively. During 2014 Peno collected \($4,900,000\) from customers. What amount of credit sales did Peno make during 2014?
c. Noir Inc. (Noir) capitalizes certain development costs and amortizes them over five years. On January 1, 2013 the balance in Noir’s development cost account on the balance sheet was \($333,000\) and on December 31, 2013 the balance was \($422,000\). During 2013 the amortization expense for development costs was \($62,000\). What amount of development costs did Noir capitalize during 2013? Assume that Noir doesn’t have a separate contra-asset account for accumulating amortization for this account.
d. On December 31, 2014 Hythe Ltd. (Hythe) owed its employees \($121,000\). During 2014 Hythe’s employees earned \($1,400,000\) and were paid \($1,320,000\). How much did Hythe owe its employees on December 31, 2013?
e. Cadzow Inc. (Cadzow) purchases all of its inventory on credit. On January 1, 2013 Cadzow had \($2,000,000\) of inventory on hand and on December 31, 2013 it had \($1,600,000\) of inventory. Cost of goods sold during 2013 was \($9,200,000\). The balances in Cadzow’s accounts payable account on January 1, 2013 and December 31, 2013 were \($1,700,000\) and \($1,400,000\) respectively. How much did Cadzow Pay its suppliers during 2013?
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