Alpaca Corporation had revenues of $200,000 in its first year of operations. The
company has not collected on $20,000 of its sales and still owes $25,000 on $70,000 of
merchandise it purchased. The company had no inventory on hand at the end of the
year. The company paid $15,000 in salaries. Owners invested $20,000 in the business
and $20,000 was borrowed on a five-year note. The company paid $2,000 in interest
that was the amount owed for the year, and paid $6,000 for a two-year insurance policy
on the first day of business. Alpaca has an effective income tax rate of 40%.
Compute the cash balance at the end of the first year for Alpaca Corporation.
Summary data for Benedict Construction Co.’s (BCC) Job 1227, which was completed
in 2016, are presented below:
Assuming BCC recognizes revenue upon project completion, what would gross profit
have been in 2015 and 2016 (rounded to the nearest thousand)?
Use the following to answer questions 119-124: You are reviewing O’Brian Co.’s
adjusted trial balance for the year ended 12/31/16. You notice several omissions and
incorrect items during your review, some of which are noted below. For each one, you
are to determine what effect, if any, these items would have on the stated components of
O’Brian Co.’s 2016 Income Statement and 12/31/16 Balance Sheet if they are not
corrected or updated. Assume no income taxes. Use the following code for your
answers. You need not include any dollar amounts.
N = No Effect
O = Overstated
U = Understated
Pension data for Sewell Corporation include the following for the current calendar year:
Required:
Assuming cash contributions were made at the end of the year, what was the amount of
those contributions?
