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 the operating activities is______
2. The cash flow from investing activities is ______
3. The cash flow from financing activities is ______
Part B
Select 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 Sales
25,000 30,000
Cost of Good 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
Compare 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
Prepare an income statement showing departmental contribution margin based on the following.
Dept X Dept Y Rent Exp
Space (sq ft) 17,500 (X)
Rent Expense 35,000
Net Sale $60,000 (X)
Net sales $40,000 (Y)
Cost of Goods Sold $18,000(X)
Cost of Good Sold Rent Exp $16,000
Rent expense (allocated based on square feet) $2700
Part D
From the following transactions, prepare the appropriate general journal entries for the month of April.
1. Raw materials costing $60,000 were issued from the storeroom.
2. Direct labor of $53,000 was charged to production.
3. Indirect labor cost of $17,000 were incurred.
4. Overhead was applied at the rate of 40% of direct labor dollars.
5. Completed products costing $42,000 were transferred to finished goods.
6. Products costing $32,000 were sold.
