Exam 4: Structure of the Balance Sheet and Statement of Cash Flows

Selected data for Kris Corporation's comparative balance sheets for Year 1 and Year 2 are as follows: Assets Year 1 Year 2 Cash \ 100,000 (\ 50,000) Accounts receivable (net) 50,000 100,000 Inventory 100,000 250,000 Equipment (net) \ 300,000 Total assets \ 550,000 \ 650,000 Liabilities and Equity Accounts payable \ 150,000 \ 100,000 Income taxes payable 80,000 30,000 Bonds payable 100,000 80,000 Common stock 100,000 200,000 Retained earnings 120,000 240,000 Total liabilities and Equity \ 550,000 \ 650,000 A brief income statement for Year 2 shows the following: Sales \9 00,000 Cost of goods sold \ 500,000 Operating expenses 100,000 Depreciation 50,000 Income tax expense 100,000 750,000 Net Income \1 50,000 -How much cash did Kris collect from customers during Year 2? Assume all sales are on credit.

Under U.S.GAAP,assets are presented in decreasing order of liquidity.Under IFRS,

Monetary assets are comprised of

Net accounts receivable is carried on the balance sheet at expected net realizable value,not at original historical cost.

Liquidity refers to the ability of a company to generate sufficient cash flows to maintain its productive capacity and still meet interest and principal payments on long-term debt.

It is not unusual for a start-up company to experience total negative cash flows.

The U.K.Equity account "Share premium" is reported on U.S.GAAP balance sheets as

Issuing capital stock for cash represents an investing activity.