Assignment 1

STUDENT NUMBER 20231406

NAME

- Answer Submission Method: All answers must be handwritten. Using a

tablet PC for handwriting is also acceptable.

- Submission Deadline: Answers must be uploaded to the Blackboard system

by the class time on Tuesday, April 16th.

- Late Submission Policy: Late submissions, regardless of the reason, will not
be accepted.

- Grading Policy: The grading will not focus on whether the answers are
correct or not, but on how the work has been completed.
 1. Write the word or phrase that is defined or indicated.
(1) Obligations expected to be settled in the next year or operating cycle.

Current Liabilities
(2) Statement showing assets, liabilities, and equity at a point in time.

Balancesheet
(3) Present obligations of an entity to transfer economic resources as a result of past events.

Liabilcties
(4) Resources expected to be used, sold, or converted to cash in one year or the operating cycle,
whichever is longer.

Carrent Assets
(5) Tangible long-lived assets used in regular operations.

Property .
plantand Eauipment
(6) Economic rights or competitive advantages which lack physical substance.
intangible Assets
(7) Resources expected to provide future economic benefits.
Assets

(8) Residual interest in the net assets of an entity.

Equty
2. Given the following account information for Leong Corporation after its first year of operations,
prepare a statement of financial position in report form for the company as of December 31, 2022.
All accounts have normal balances.

Equipment ¥ 40,000

: Interest Expense
Interest Payable
Retained Earnings
2,400
600
? 2580
=

U Dividends 50,400
U Land 157,320
U Inventory 102,000
Bonds Payable 78,000
Notes Payable (due in 6 months) 24,400
Share Capital–Ordinary 60,000
Accumulated Depreciation - Equip. 10,000
Prepaid Advertising 5,000
i Revenue
Buildings
351,400
80,400
V Supplies 1,860
V Taxes Payable 3,000
Utilities Expense 1,320
( Advertising Expense
Salaries and Wages Expense
1,560
53,040
V Salaries and Wages Payable 900
 V Accumulated Depr. - Buildings 15,000
V Cash 40,000
Depreciation Expense 8,000
N

Statement of Financial Posction

Asset equipment 12131 ,
2022
Property Plantand
.

land 151 320

Buildings 801400
Accumulated )
l(5 000
pepr= Buildings
.

400
65 ,

Eauipment 401000
Accumulated )
( 0100
o

pepreciation
- Eawip
DoO
3O (
current Assets 00
1 O2(o
inventong
supplies 11800
prepaid adverfising 51000
cash 40 L0O0

401 ( 580

Equtysliabilaty
Equity
share capstal
bolooo
-
ordinary
bD
Refained Earaings 234 .

2a 4 ib8

liabilct
Noncurren liabllcae
Bonds payable 28 (
000

curnentliablloy
Notes palable
241400
Taxes 3 000
pal able .

salariesand
qoo
wages payhbue
600
Interest payable

1 ob , doo
3. Selected financial statement information and additional data for Johnston Enterprises is presented
below. Prepare a statement of cash flows for the year ending December 31, 2022

Johnston Enterprises
Statement of Financial Position and Income Statement Data
December 31, December 31,
2022 2021
Property, Plant, and Equipment HK$1,241,000 HK$1,122,000
Less: Accumulated Depreciation (476,000) (442,000)
765,000 680,000
Current Assets:
Inventory 391,000 340,000
Accounts Receivable 238,000 306,000
Cash 153,000 119,000
Total Current Assets 782,000 765,000

Total Assets HK$1,547,000 HK$1,445,000

Equity:
Share Capital–Ordinary HK$ 510,000 HK$ 467,500
Retained Earnings 374,000 340,000
Total Equity 884,000 807,500

Non-Current Liabilities:
Bonds Payable 340,000 391,000

Current Liabilities:
Accounts Payable 187,000 102,000
Notes Payable 51,000 68,000
Income Taxes Payable 85,000 76,500
Total Current Liabilities 323,000 246,500

Total Liabilities 663,000 637,500

Total Liabilities & Equity HK$1,547,000 HK$1,445,000

Sales Revenue HK$1,615,000 HK$1,513,000

Less Cost of Goods Sold 731,000 731,000
Gross Profit 884,000 782,000
Expenses:
Depreciation Expense 153,000 136,000
Salaries and Wages Expense 391,000 357,000
Interest Expense 34,000 34,000
Loss on Sale of Equipment 17,000 0
Income Before Taxes 289,000 255,000
Less Income Tax Expense 119,000 102,000
Net Income HK$ 170,000 HK$ 153,000

Additional Information:
During the year, Johnston sold equipment with an original cost of HK$153,000 and accumulated
depreciation of HK$119,000 and purchased new equipment for HK$272,000.
 State ment
of cash Flows
31 ,
2022
December
For the year Ended

NetIncome
0
HK $ noloo

acfivities
fom Operating
Cash flow
1531000
expense
pepreccatlon 17 .
000

Sale
ofequipment
Loss on receivable 68c 000

[n
accounf
Decrease ( 5l 000 )
inventory
.

in
increase 85 c 000
in accounf payable
increase
( 17 000 )
note Payable .

Decrease in

Increase in taX payable 81500

263 . 500

Net casn providedby 4331500

operating actauifies
investing activitles
Cash flow from 171000
sale ofequipment 000 )
( 2 n2 .

purchase f
o
equipmet

(nvesting
acteoties [
(255 ( 000 )
Cash used by
INef

( uities
from financing act
Cash flow (5l ( 000)
Reftrement
of bond payable 42 (500
Issuance of ordenanyshares O
dlvidends 13 6100 ( 340 . 00 tin 0 .

)
of
payment
0
0
. ..

Nex Cash used by financiny act( oitles ( 644 . 500)

increase in cash 34 . 000

Net
cash 000
Beginning 119 .

of year 1531 000

cash at end
4. Financial statements for Hilton Company are presented below:

Hilton Company
Statement of Financial Position
December 31, 2022
Assets Equity & Liabilities
Buildings and equipment €150,000 Share capital–ordinary €65,000
Accumulated depreciation— Retained earnings 60,000
buildings and equipment (50,000)
Patents 20,000
Accounts receivable 35,000 Bonds payable 50,000
Cash 40,000 Accounts payable 20,000
€195,000 €195,000

Hilton Company
Statement of Cash Flows
For the Year Ended December 31, 2022
Cash flows from operating activities
Net income €45,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Increase in accounts receivable €(16,000)
Increase in accounts payable 8,000
Depreciation expense 15,000
Gain on sale of equipment (6,000)
Amortization of patents 2,000 3,000
Net cash provided by operating activities 48,000
Cash flows from investing activities
Sale of equipment 12,000
Purchase of land (25,000)
Purchase of buildings and equipment (48,000)
Net cash used by investing activities (61,000)
Cash flows from financing activities
Payment of cash dividend (15,000)
Sale of bonds 40,000
Net cash provided by financing activities 25,000
Net increase in cash 12,000
Cash, January 1, 2022 28,000
Cash, December 31, 2022 €40,000

At the beginning of 2022, Accounts Payable amounted to €12,000 and Bonds Payable was €10,000.
Calculate the following for Hilton Company:
a. Current cash debt coverage
b. Cash debt coverage
c. Free cash flow
a 48( 000
=

oc 000 )
( (2ooot2

b 48( 000
÷2
ot 7 o. 000) "
(o0

C 000 15 ( 000
-

40. 000
73 .
-
=

481000
~

25c
000 t48 cooo