Problem -
Comparative balance sheets for 2013 and 2014 and an income statement for 2014 are provided below for A2Z Industries. Additional information from the accounting records of A2A is also provided.
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A2Z Industries Comparative Balance Sheets December 31, 2014 and 2013 ($ in 000)
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2014
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2013
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Assets:
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Cash
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$1,800
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$1,125
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Accounts receivable
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1,800
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1,350
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Inventory
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2,700
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1,575
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Available for sale securities, at FMV
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500
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400
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Land
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2,025
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1,800
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Building
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2,700
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2,700
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Less: Acc. Depreciation
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(900)
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(810)
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Equipment
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8,550
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6,750
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Less: Acc. Depreciation
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(1,575)
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(1,440)
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Patent
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3,600
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4,500
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$20,700
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$17,550
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Liabilties:
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Accounts payable
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$2,250
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$1,350
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Accrued expenses payable
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900
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675
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Lease liability-land
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450
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0
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Stockholders' Equity:
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Common Stock
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9,450
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9,000
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PIC in excess of pa
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2,250
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2,025
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Retained earnings
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5,400
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4,500
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Accumulated other comprehensive income
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100
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0
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$20,700
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$17,550
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A2Z Industries Income Statement For the year ended December 31, 2014 ($ in 000)
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Revenues:
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Sales revenue
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$7,935
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Gain on sale of land
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270
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Total Revenues
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$8,205
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Expenses:
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Cost of goods sold
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$1,800
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Depreciation expense-building
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90
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Depreciation expense-equipment
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945
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Loss on sale of equipment
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45
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Amortization of patent
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900
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Operating expenses
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1,500
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Total expenses
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5,280
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Net income
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$2,925
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Additional information:
a. The AFSS were purchased on December 31, 2013. There were no additional purchases or sales of AFSS during 2014.
b. During 2014, equipment with a cost of $900 (90% depreciated) was sold.
c. The Statement of Shareholders' Equity reveals reductions of $675 and $1,350 for stock dividends and cash dividends, respectively.
Required: Prepare the "T" accounts and Statement of Cash Flows of A2Z for the year ended December 31, 2014. Use the direct method.