Fundamentals of Financial Accounting, 5/e 1-21
ANSWERS TO COACHED PROBLEMS
CP1-1
Req. 1 NUCLEAR COMPANY
Income Statement
For the Year Ended December 31
Sales Revenue
$ 88,000
Expenses
Operating Expenses
57,200
Other Expenses
8,850
Total Expenses
66,050
Net Income
$ 21,950
Req.2 NUCLEAR COMPANY
Statement of Retained Earnings
For the Year Ended December 31
Retained Earnings, January 1
$ 0
Add: Net Income
21,950
Subtract: Dividends
(200)
Retained Earnings, December 31
$ 21,750
Fundamentals of Financial Accounting, 5/e 1-22
CP1-1 (continued)
Req. 3 NUCLEAR COMPANY
Balance Sheet
At December 31
Assets
Cash
$ 12,000
Accounts Receivable
59,500
Supplies
8,000
Equipment
36,000
Total Assets
$ 115,500
Liabilities
Accounts Payable
$ 30,000
Notes Payable
1,470
Total Liabilities
31,470
Stockholder’s Equity
Common Stock
62,280
Retained Earnings
21,750
Total Stockholder’s Equity
84,030
Total Liabilities and Stockholder’s Equity
$ 115,500
Fundamentals of Financial Accounting, 5/e 1-23
CP1-2 (continued)
Req. 1
Nuclear Company is profitable as indicated by the net income of $21,950 reported on
the income statement.
Req. 2
CP1-3
Req. 1 LIFE TIME FITNESS, INC.
Income Statement
For the Nine Months Ended September 30, 2013
(in thousands)
Service Revenue $ 914,900
Expenses
Operating Expenses 527,200
Fundamentals of Financial Accounting, 5/e 1-24
CP1-3 (continued)
Req. 2 LIFE TIME FITNESS, INC.
Statement of Retained Earnings
For the Nine Months Ended September 30, 2013
(in thousands)
Req. 3 LIFE TIME FITNESS, INC.
Balance Sheet
At September 30, 2013
(in thousands)
Assets
Cash
$ 19,700
Accounts Receivable
50,200
Supplies
30,700
Equipment
2,153,200
Total Assets
$ 2,253,800
Liabilities
Accounts Payable
$ 147,200
Notes Payable
965,600
Total Liabilities
1,112,800
Stockholder’s Equity
Common Stock
416,400
Retained Earnings
724,600
Total Stockholders Equity
1,141,000
Total Liabilities and Stockholder’s Equity
$ 2,253,800
CP1-3 (continued)
Req. 4 LIFE TIME FITNESS, INC.
Statement of Cash Flows
For the Nine Months Ended September 30, 2013
(in thousands)
CP1-4
Req. 1
With approximately $1,112 million in total liabilities and $1,141 million in total
stockholders’ equity, Life Time Fitness relies slightly more on stockholders for its
financing at September 30, 2013. This information is presented on the balance sheet.
Req. 2
Fundamentals of Financial Accounting, 5/e 1-26
ANSWERS TO GROUP A PROBLEMS
PA1-1
Req. 1 HIGH POWER CORPORATION
Income Statement
For the Year Ended December 31
Sales Revenue $90,000
Expenses
Req.2 HIGH POWER CORPORATION
Statement of Retained Earnings
For the Year Ended December 31
Retained Earnings, January 1 $ 0
Fundamentals of Financial Accounting, 5/e 1-27
PA1-1 (continued)
Req. 3 HIGH POWER CORPORATION
Balance Sheet
At December 31
Assets
Cash
$ 13,300
Accounts Receivable
9,550
Supplies
5,000
Equipment
86,000
Total Assets
$ 113,850
Liabilities
Accounts Payable
$ 32,100
Notes Payable
1,160
Total Liabilities
33,260
Stockholders’ Equity
Common Stock
59,090
Retained Earnings
21,500
Total Stockholders Equity
80,590
Total Liabilities and Stockholders’ Equity
$ 113,850
PA1-2
Req. 1
High Power Corporation’s balance sheet indicates that the company was financed
mainly by stockholders at December 31 because total stockholders’ equity ($80,590)
was greater than total liabilities ($33,260).
Req. 2
PA1-3
Fundamentals of Financial Accounting, 5/e 1-28
Req. 1
OPENTABLE, INC.
Income Statement
For the nine months ended September 30, 2013
Revenues:
Service Revenue
$137,800
Total Revenues
137,800
Expenses:
Salaries and Wages Expense
35,700
Office Expenses
14,300
Utilities Expense
25,100
Interest Expense
29,500
Income Tax Expense
10,100
Total Expenses
114,700
Net Income
$ 23,100
Req. 2
OPENTABLE, INC.
Statement of Retained Earnings
For the Nine Months Ended September 30, 2013
Retained Earnings, January 1, 2013
$ 6,300
Add: Net Income
23,100
Subtract: Dividends
-0-
Retained Earnings, Septmeber 30, 2013
$ 29,400
Fundamentals of Financial Accounting, 5/e 1-29
PA1-3 (continued)
Req. 3
OPENTABLE, INC.
Balance Sheet
At September 30, 2013
Assets
Cash
$ 102,800
Accounts Receivable
22,800
Inventories
17,200
Prepaid Rent
7,000
Equipment
136,700
Total Assets
$ 286,500
Liabilities
Accounts Payable
$ 45,000
Notes Payable
23,600
Wages Payable
8,000
Total Liabilities
76,600
Stockholders’ Equity
Common Stock
180,500
Retained Earnings
29,400
Total Stockholders Equity
209,900
Total Liabilities and Stockholders’ Equity
$ 286,500
PA1-3 (continued)
Req. 4
OPENTABLE, INC.
Statement of Cash Flows
For the Nine Months Ended September 30, 2013
Cash Flows from Operating Activities
Cash received from customers
$137,000
Cash paid for income taxes
(11,000)
Cash paid to suppliers and employees
(83,200)
Cash Provided by Operating Activities
42,800
Cash Flows from Investing Activities
Cash paid to purchase long-term assets
(41,000)
Cash used in Investing Activities
(41,000)
Cash Flows from Financing Activities
Cash from issuing common stock
21,000
Cash paid to reacquire common stock
(23,500)
Cash used in Financing Activities
(2,500)
Change in Cash
(700)
Cash at January 1, 2013
103,500
Cash at September 30, 2013
$102,800
PA1-4
Req. 1
With $76,600 in total liabilities and $209,900 in total stockholders’ equity, Opentable Inc.
relies more on stockholders for its financing at September 30, 2013. This information is