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    TT05 Question

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    Trinh Nguyen Linh Chi
    The document provides the financial statements of Zumbra Company for 2017 and 2016, including the balance sheet showing assets of $126,000 and $108,000, and liabilities and equity of the same amounts. The income statement shows sales of $242,000, costs of $175,000, and net income of $32,000. Additional notes provide details on dividends, equipment sale, depreciation expense, and that all sales and purchases are on account.

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    TT05 Question

    Uploaded by

    Trinh Nguyen Linh Chi
    165 views2 pages
    The document provides the financial statements of Zumbra Company for 2017 and 2016, including the balance sheet showing assets of $126,000 and $108,000, and liabilities and equity of the same amounts. The income statement shows sales of $242,000, costs of $175,000, and net income of $32,000. Additional notes provide details on dividends, equipment sale, depreciation expense, and that all sales and purchases are on account.

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    The document provides the financial statements of Zumbra Company for 2017 and 2016, including the balance sheet showing assets of $126,000 and $108,000, and liabilities and equity of the same amounts. The income statement shows sales of $242,000, costs of $175,000, and net income of $32,000. Additional notes provide details on dividends, equipment sale, depreciation expense, and that all sales and purchases are on account.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    165 views2 pages

    TT05 Question

    Uploaded by

    Trinh Nguyen Linh Chi
    The document provides the financial statements of Zumbra Company for 2017 and 2016, including the balance sheet showing assets of $126,000 and $108,000, and liabilities and equity of the same amounts. The income statement shows sales of $242,000, costs of $175,000, and net income of $32,000. Additional notes provide details on dividends, equipment sale, depreciation expense, and that all sales and purchases are on account.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 2

    TUTORIAL TEST 05

    The following are the financial statements of Zumbra Company.

    ZUMBRA COMPANY
    Comparative Balance Sheet
    December 31
    2017 2016
    Assets
    Cash US 38,000 US 20,000
    Accounts Receivable 30,000 14,000
    Inventory 27,000 20,000
    Equipment 60,000 78,000
    Accumulated depreciation--equipment (29,000) (24,000)
    Total US 126,000 US 108,000

    Liabilities and Stockholders' Equity


    Accounts payable US 24,000 US 15,000
    Income taxes payable 7,000 8,000
    Bonds payable 27,000 33,000
    Common stock 18,000 14,000
    Retained earnings 50,000 38,000
    Total US 126,000 US 108,000

    ZUMBRA COMPANY
    Income Statement
    For the Year ended December 31, 2017

    Sales revenue US$242,000


    Cost of goods sold 175,000
    Gross profit 67,000
    Operating expenses 24,000
    Income from operations 43,000
    Interest expense 3,000
    Income before income taxes 40,000
    Income tax expense 8,000
    Net income US$32,000

    Additional data:
    1. Dividends declared and paid were $20,000.
    2. During the year equipment was sold for $8,500 cash. This equipment cost $18,000
    originally and had a book value of $8,500 at the time of sale.
    3. All depreciation expense, $14,500, is in the operating expenses.
    4. All sales and purchases are on account.
    $‎
    $‎
    $‎
    $‎
    $‎
    $‎
    $‎
    $‎








    Instructions
    (a) Prepare a statement of cash flows using the indirect method.
    (b) Compute free cash flow.

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