Below Is an Income Statement and a Statement of Cash

question 47

Essay

Below is an Income Statement and a Statement of Cash Flows for Morgan Corporation for Year 8.
$\begin{array}{ll}\text { Morgan Corporation}\\\text { Income Statement}\\\text { For the Year Ended December 31 , Year 8}\\\text { Sales Revenue } & \$ 11,400 \\\text { Gain on Sale of Equipment } & 60 \\\text { Interest Revenue } & \underline{16} \\\text { Total Revenues } &{11,476} \\\text { Cost of Goods Sold } & (7,070) \\\text { Selling and Administrative Expense } & (2,240) \\\text { Interest Expense } & (210)\\\text { Income Tax Expense } & \underline{(752)} \\\text { Net Income } &\underline{\$ 1.204} \end{array}$
Required:
Respond to each of the following questions.
a. Compute the amount of cash collected from customers during Year 8.
b. Compute the amount of cash paid to suppliers for merchandise during Year 8.
c. Compute the amount of income taxes paid to governmental agencies during Year 8.
d. Property, plant and equipment (at cost) had a balance of $3,700 on January 1, Year 8 and $3,940 on December 31, Year 8. Accumulated depreciation had a balance of $1,290 on January 1, Year 8 and $1,540 on December 31, Year 8. Give the journal entry that Morrissey Corporation made in its accounting records during Year 8 to record the sale of the equipment.
e. The balance in the retained earnings account on December 31, Year 8 after closing entries was $1,154. Compute the balance in the retained earnings account on January 1, Year 8.

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Definitions:

Occurrence

An event or incident that takes place, often used in legal and insurance contexts to specify an event covered by a policy or agreement.

Nonoccurrence

The failure or absence of an event or condition that was anticipated or required.

Event

A specific occurrence or happening, often of significance, that takes place at a particular time.

Agreement

A mutual understanding or arrangement between two or more parties outlining terms and conditions for a specific purpose.