7. Consider theeffects of the independent transactions, a through i, on acompanyâs balance sheet, income statement, statement of cash flows,and statement of stockholdersâ equity.
a. The company purchasedinventory on credit.
b. The company sold allinventory purchased in transaction a) on credit (and formore than its cost).
c. The company collectedcash from customers from transaction b).
d. The company purchasedequipment with cash.
e. The company paid cash fora note payable that came due.
f. The company paidcash for interest on borrowings.
g. Wages were earned bycompany employees but not yet paid.
h. The company paid cash individends.
i. The companyreceived cash for the issuance of stock.
Complete the table below to explainthe effects and financial statement linkages. Use â+â to indicatethe account increases and âââ to indicate the account decreases (15pts).
a.
b.
c.
d.
e.
f.
g.
h.
i.
Balance sheet
Cash
Noncash assets
Total liabilities
Contributed capital
Retained earnings
Statement of cash flows
Operating cash flow
Investing cash flow
Financing cash flow
Income statement
Revenues
Expenses
Net earnings
Statement of stockholdersâ equity
Contributed capital
Retained earnings
7. Consider theeffects of the independent transactions, a through i, on acompanyâs balance sheet, income statement, statement of cash flows,and statement of stockholdersâ equity.
a. The company purchasedinventory on credit.
b. The company sold allinventory purchased in transaction a) on credit (and formore than its cost).
c. The company collectedcash from customers from transaction b).
d. The company purchasedequipment with cash.
e. The company paid cash fora note payable that came due.
f. The company paidcash for interest on borrowings.
g. Wages were earned bycompany employees but not yet paid.
h. The company paid cash individends.
i. The companyreceived cash for the issuance of stock.
Complete the table below to explainthe effects and financial statement linkages. Use â+â to indicatethe account increases and âââ to indicate the account decreases (15pts).
a. | b. | c. | d. | e. | f. | g. | h. | i. | |||||||||||
Balance sheet | |||||||||||||||||||
Cash | |||||||||||||||||||
Noncash assets | |||||||||||||||||||
Total liabilities | |||||||||||||||||||
Contributed capital | |||||||||||||||||||
Retained earnings | |||||||||||||||||||
Statement of cash flows | |||||||||||||||||||
Operating cash flow | |||||||||||||||||||
Investing cash flow | |||||||||||||||||||
Financing cash flow | |||||||||||||||||||
Income statement | |||||||||||||||||||
Revenues | |||||||||||||||||||
Expenses | |||||||||||||||||||
Net earnings | |||||||||||||||||||
Statement of stockholdersâ equity | |||||||||||||||||||
Contributed capital | |||||||||||||||||||
Retained earnings | |||||||||||||||||||
Related questions
Recording Transactions (Including Adjusting and Closing Entries), Preparing Financial Statements, and Performing Ratio Analysis
Josh and Kelly McKay began operations of their furniture repair shop (Furniture Refinishers, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2017, was as follows:
| Account Titles | Debit | Credit |
| Cash | â5,000 | |
| Accounts receivable | â4,000 | |
| Supplies | â2,000 | |
| Small tools | â6,000 | |
| Equipment | ||
| Accumulated depreciation (on equipment) | ||
| Other assets (not detailed to simplify) | â9,000 | |
| Accounts payable | â7,000 | |
| Notes payable | ||
| Wages payable | ||
| Interest payable | ||
| Income taxes payable | ||
| Unearned revenue | ||
| Common stock (60,000 shares, $0.10 par value) | â6,000 | |
| Additional paid-in capital | â9,000 | |
| Retained earnings | â4,000 | |
| Service revenue | ||
| Depreciation expense | ||
| Wages expense | ||
| Interest expense | ||
| Income tax expense | ||
| Remaining expenses (not detailed to simplify) | ||
| âTotals | 26,000 | 26,000 |
Transactions during 2017 follow:
A.Borrowed $20,000 cash on July 1, 2017, signing a one-year, 10 percent note payable.
B.Purchased equipment for $18,000 cash on July 1, 2017.
C.Sold 10,000 additional shares of capital stock for cash at $0.50 market value per share at the beginning of the year.
D.Earned $70,000 in revenues for 2017, including $14,000 on credit and the rest in cash.
E.Incurred remaining expenses of $35,000 for 2017, including $7,000 on credit and the rest paid with cash.
F.Purchased additional small tools, $3,000 cash.
G.Collected accounts receivable, $8,000.
H.Paid accounts payable, $11,000.
I..Purchased $10,000 of supplies on account.
J.Received a $3,000 deposit on work to start January 15, 2018.
K.Declared and paid a cash dividend, $10,000.
Data for adjusting entries:
L.Supplies of $4,000 and small tools of $8,000 were counted on December 31, 2017 (debit Remaining Expenses).
M.Depreciation for 2017, $2,000.
N.Interest accrued on notes payable (to be computed).
O.Wages earned since the December 24 payroll but not yet paid, $3,000.
P.Income tax expense was $4,000, payable in 2018.
Required:
1.Set up T-accounts for the accounts on the trial balance and enter beginning balances.
2.Prepare journal entries for transactions (a) through (k) and post them to the T-accounts.
3.Journalize and post the adjusting entries (l) through (p).
4.Prepare an income statement (including earnings per share rounded to two decimal places), statement of stockholdersâ equity, and balance sheet.
5.Identify the type of transaction for (a) through (k) for the statement of cash flows (O for operating, I for investing, F for financing), and the direction and amount of the effect.
6.Journalize and post the closing entry.
7.Compute the following ratios (rounded to two decimal places) for 2017 and explain what the results suggest about the company:
a,Current ratio
b,Total asset turnover
c,Net profit margin
I have already answered questions 1 and 2, I don't need help with those. I posted those for the information in case you need it for the other questions.
[The following information applies to the questions displayed below.]
| Vanishing Games Corporation (VGC) operates a massively multiplayer online game, charging players a monthly subscription of $10. At the start of January 2015, VGCâs income statement accounts had zero balances and its balance sheet account balances were as follows: |
| Cash | $ | 2,360,000 | |
| Accounts Receivable | 152,000 | ||
| Supplies | 19,100 | ||
| Equipment | 948,000 | ||
| Land | 1,920,000 | ||
| Building | 506,000 | ||
| Accounts Payable | 109,000 | ||
| Unearned Revenue | 152,000 | ||
| Notes Payable (due 2018) | 80,000 | ||
| Common Stock | 2,200,000 | ||
| Retained Earnings | 3,364,100 | ||
| In addition to the above accounts, VGCâs chart of accounts includes the following: Service Revenue, Salaries and Wages Expense, Advertising Expense, and Utilities Expense.
6. Prepare a Statement of Retained Earnings for the month ended January 31, 2015, using the beginning balance given above and the net income from part 5. Assume VGC has no dividends.
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Solve the follwing Problem.
First create an Accounting Equation Grid. Then, Incomestatement, Retained Earning statment and Balance Sheet.
On August 1, 2018, Brooke Kline established Western Realty.Brooke completed the following transactions during the month ofAugust.
| A. | Opened a business bank account with a deposit of$22,000 in exchange for common stock. |
| B. | Paid rent on office and equipment for the month, $2,500. |
| C. | Paid automobile expenses (including rental charge) for month,$1,350, and miscellaneous expenses, $500. |
| D. | Purchased office supplies on account, $1,150. |
| E. | Earned sales commissions, receiving cash, $18,000. |
| F. | Paid creditor on account, $650. |
| G. | Paid office salaries, $2,900. |
| H. | Paid dividends, $3,000. |
| I. | Determined that the cost of supplies on hand was $400;therefore, the cost of supplies used was $750. |
| Required: | |
|---|---|
| 1. | Indicate the effect of each transaction and the balances aftereach transaction, using the tabular headings in the exhibit below.In each transaction row (rows indicated by a letter), you mustindicate the math sign (+ or -) in columns affected by thetransaction. You will not need to enter math signs in the balancerows (rows indicated by Bal.). Entries of 0 (zero) are not requiredand will be cleared if entered. |
| Assets | = Liabilities + | Stockholdersâ Equity | ||||||||
| Accounts | Common | Sales | Salaries | Rent | Auto | Supplies | Miscellaneous | |||
| Cash | + Supplies | = Payable | + Stock | - Dividends | + Commissions | - Expense | - Expense | - Expense | - Expense | - Expense |
| 2. a. Prepare an income statement for August. If a net loss hasbeen incurred, enter that amount as a negative number using a minussign. Refer to the list of Labels, Accounts and Amount Descriptionsfor the exact wording of the answer choices for text entries. Besure to complete the statement heading. You will not need to entercolons (:) on the income statement. | |
| 2. b. Prepare a retained earnings statement for August. Referto the list of Labels, Accounts and Amount Descriptions for theexact wording of the answer choices for text entries. Be sure tocomplete the statement heading. If a net loss is incurred ordividends were paid, enter that amount as a negative number using aminus sign. The word âLessâ or âAddâ is not needed in the RetainedEarnings Statement. If an amount is zero, enter "0". | |
| 2. c. Prepare a balance sheet as of August 31. Refer to thelist of Labels, Accounts and Amount Descriptions for the exactwording of the answer choices for text entries. Be sure to completethe statement heading. |
