ASSIGNMENT 08
A03 Principles of Accounting II
Part A (5 points each for a possible
total of 15 points)
The
following information is given for Tripp Company, which uses the indirect
method.
Net income $20,000
Depreciation expense 3,000
Increase in accounts receivable 2,000
Payment of dividends 2,000
Proceeds from sale of equipment 6,000
Increase in accounts payable 4,000
Decrease in inventory 3,000
From the information provided, answer
the following questions:
(1)
The
cash flow from operating activities is ________.
(2)
The
cash flow from investing activities is ________.
(3)
The
cash flow from financing activities is ________.
Part B (5 points each for a possible
total of 25 points)
Selected data for Stick’s Design are given as
of December 31, Year 1 and Year 2 (rounded to the nearest hundredth).
Year 2 Year 1
Net
Credit Sales $25,000 $30,000
Cost
of Goods Sold 16,000 18,000
Net
Income 2,000 2,800
Cash 5,000 900
Accounts
Receivable 3,000 2,000
Inventory 2,000 3,600
Current
Liabilities 6,000 5,000
Compute the following:
(1)
Current ratio for Year 2.
(2)
Acid-test ratio for Year 2.
(3)
Accounts receivable turnover for Year
2.
(4)
Average collection period for Year 2.
(5)
Inventory turnover for Year 2.
Part C (30 points)
Prepare
an income statement showing departmental contribution margin based on the
following:
Dept. X Dept. Y Rent
Expense
Space
(square feet) 17,500 35,000
Net
Sales $60,000 $40,000
Cost
of Goods Sold 18,000 16,000
Rent
Expense (allocated based on square feet) $2,700
