Diaz Company Had the Following Comparative Balance Sheet Information for 2014

question 11

Essay

Diaz Company had the following comparative balance sheet information for 2014 and 2013at the end of Year 2 and Year 1: $\begin{array}{l}\hline \quad\quad\quad\quad\quad\quad\quad\quad\quad\quad \text {Diaz Company }\\\hline \quad\quad\quad\quad\quad\quad\quad \text {Comparative Balance Sheets} \\\begin{array}{|l|}\hline\\\hline\\\hline \text { Cash}\\\hline \text {Accounts receivable}\\\hline \text {Inventory}\\\hline \text {Prepaid insurance}\\\hline \text {Property, plant and equipment}\\\hline \text {Accumulated depreciation}\\\hline \text {Total}\\\hline\\\hline \text {Accounts payable}\\\hline \text {Bonds payable}\\\hline \text {Common stock}\\\hline \text {Retained earnings}\\\hline \text {Total}\\\hline\end{array}\begin{array}{l|}\hline 2014 \\\hline \\\hline 30,000 \\\hline 48,000 \\\hline 158,000 \\\hline 10,000 \\\hline 70,000 \\\hline(14,000) \\\hline 302,000 \\\hline \\\hline 14,000 \\\hline 90,000 \\\hline 140,000 \\\hline 58,000 \\\hline 302,000 \\\hline \end{array}\begin{array}{l|}\hline 2013\\\hline\\\hline 28,000 \\\hline 50,000 \\\hline 156,000 \\\hline 8,000 \\\hline 60,000 \\\hline(10,000) \\\hline 292,000 \\\hline \\\hline 18,000 \\\hline 120,000 \\\hline 120,000 \\\hline 34,000 \\\hline 292,000 \\\hline \end{array}\end{array}$ Diaz reported net income for 2014 Year 2 of $40,000.No property,plant,& equipment was disposed of during the year.Diaz uses the indirect method to prepare the statement of cash flows.

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Definitions:

Economic Entities

Organizations or individuals engaged in economic activities, recognized as separate units for accounting and financial reporting.

Revenues

Revenues are the total amount of money generated by the sale of goods or services related to a company's primary operations.