1.Using the FASB Codification login information provided, research the following. For each, identify the topic, subtopic, and section number (as applicable) that provide guidance for each and write the appropriate citation. For example, the topic, subtopic, and section number for the subsequent measurement of asset retirement obligations are 410, 20, and 35 respectively. Therefore, the citation is:
FASB ASC 410-20-35: "Asset Retirement and Environmental Obligations-Asset Retirement Obligations-Subsequent Measurement."
a.Fair value measurements and disclosures overall disclosures.
b.Business combinations.
c.Related party disclosures.
d.Internal- use software.
e.Recognition of stock compensation.
2.Martin & Mark operate the law office of M&M, PC. Transactions that took place in 2012 and 2013 are below:
2012 2013
Amounts billed to customers for law services $380,000 $440,000
Cash collected from customers 330,000 450,000
Cash disbursements for two years rent 60,000 0
Cash disbursements for salaries paid to employees 200,000 210,000
Cash disbursements for travel 50,000 60,000
Cash disbursements for travel utilities 30,000 50,000
Utility costs incurred in 2012 were $40,000. There were no liabilities at the end of 2013 and there were no anticipated bad debts on receivables.
Answer the following:
a.Calculate the net operating cash flow for 2012 and 2013. Hint: This is cash basis accounting.
b.Prepare income statement for years 2012 and 2013 using accrual basisaccounting .
c.Determine the receivables from customers that the company would show on its 2012 and 2013 balance sheets prepared using accrual basis accounting.
Contact me for questions. See you Tuesday.
Dr. O
Assignment 4
1. The information below depicts 2013 summary for Match Company. The company has two operations, that is, manufacturing and wholesale. The amounts are in thousands.
Sales revenue $25,000
Cost of goods sold 16,000
Interest revenue 70,000
Selling and administrative expenses 4,700
Goodwill write-off 820
2014 Income taxes 1,244
Gain on sale of investments (This is normal and recurring) 110
Loss due to flood damage, net of tax (This is extraordinary item) 390
Loss on disposition of wholesale division, net of tax 440
Loss on operations of wholesale division, net of tax 90
Match Company has 500,000 shares of common stock outstanding throughout the year. The company decided to discontinue its entire wholesale operations. On August 31, 2013, Match Company sold the wholesale operations to Reed Company.
Required
Prepare a multi-step income statementand earnings per share for the Match Company.
2. Lancaster Inc.'s December 31, 2013 balance sheet accounts are copied below:
Cash $20,000
Accounts receivable 21,200
Accounts payable 30,000
Long-term notes payable 41,000
Long-term Investments 32,000
Common stock 100,000
Property, plant, and equipment assets (net of depreciation) 81,000
Retained earnings 23,200
Land 40,000
During 2014, the following transactions occurred. Lancaster Inc.
1.Purchased a tract of land for $18,000 cash.
2.Sold part of its $32,000 investment for $15,000. This transaction resulted in a gain of $3,400. The investment was classified as available-for-sale.
3.Issued additional $20,000 in common stock. The issue was at par.
4.Declared and paid dividends of $8,200 to stockholders.
5.Purchased land through the issuance of $30,000 in bonds.
6.Retired Long-term notes payable with the face value of $16,000. The company paid $16,000 cash.
7.Recorded depreciation expense of $11,000.
Lancaster's Net income for 2014 was $32,000.
Balances on December 31, 2014 are below:
Cash $32,000
Accounts Receivable$41,600
Accounts Payable $30,000
Required:
a.Prepare a statement of cash flows for year ended December 31, 2014. Use the indirect method for cash flows from operating activities.
b.How can users of financial statements utilize statement of cash flows in making informed decisions?