ACC 151 Chapter Notes - Chapter 2: Financial Statement, Income Statement, Balance Sheet
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The following list, in alphabetical order, shows the various items that regularly appear on the financial statements of Maple Park Theatres Corp. The amounts shown for balance sheet items are balances as of September 30, 2017 (with the exception of retained earnings, which is the balance on September 1, 2017), and the amounts shown for income statement items are balances for the month ended September 30, 2017.
| Accounts payable | $17,600 | Furniture and fixtures | $34,000 | |
| Accounts receivable | 6,410 | Land | 26,000 | |
| Advertising expense | 14,500 | Notes payable | 20,000 | |
| Buildings | 60,000 | Projection equipment | 25,000 | |
| Capital stock | 50,000 | Rent expenseâmovies | 50,600 | |
| Cash | 15,230 | Retained earnings | 73,780 | |
| Concessions revenue | 60,300 | Salaries and wages expense | 46,490 | |
| Cost of concessions sold | 23,450 | Ticket sales | 95,100 | |
| Dividends paid during the month | 8,400 | Water, gas, and electricity | 6,700 |
1. Using the data given, prepare an income statement for the month ended September 30, 2017.
| Maple Park Theatres Corp. | ||
| Income Statement | ||
| For The Month Ended September 30, 2017 | ||
| Revenues: | ||
| Ticket sales | $ | |
| Total revenues | $ | |
| Expenses: | ||
| $ | ||
| Total expenses | ||
| $ | ||
2. Using the data given, prepare a statement of retained earnings for the month ended September 30, 2017.
| Maple Park Theatres Corp. | |
| Statement Of Retained Earnings | |
| For The Month Ended September 30, 2017 | |
| $ | |
| $ | |
3. Using the data given, prepare a balance sheet at September 30, 2017.
| Maple Park Theatres Corp. | |
| Balance Sheet | |
| September 30, 2017 | |
| Assets | |
| $ | |
| Total assets | $ |
| Liabilities and stockholders' equity | |
| $ | |
| Total liabilities and stockholders' equity | $ |
4. You have $1,000 to invest. You want to use it to buy stock in Maple Park? Which of the following information would you least consider before making a final decision?
| 1. | Whether the company is operating at a profit? |
| 2. | The amount of dividends paid by the company. |
| 3. | The amount of salaries the company pays. |
| 4. | Current market price of the stock. |
Susanâs Consulting experienced the following transactions for2014, its first year of operations, and 2015. Assume that alltransactions involve the receipt or payment of cash.
| Transactions for2014 |
| 1. | Acquired $65,000by issuing common stock. |
| 2. | Received$115,000 cash for providing services to customers. |
| 3. | Borrowed $18,000cash from creditors. |
| 4. | Paid expensesamounting to $57,000. |
| 5. | Purchased landfor $40,000 cash. |
| Transactions for2015 |
| Beginningaccount balances for 2015 are: |
| Cash | $ | 101,000 | |
| Land | 40,000 | ||
| Notes payable | 18,000 | ||
| Common stock | 65,000 | ||
| Retained earnings | 58,000 | ||
| 1. | Acquired anadditional $23,000 from the issue of common stock. |
| 2. | Received$133,000 for providing services. |
| 3. | Paid $13,000 tocreditors to reduce loan. |
| 4. | Paid expensesamounting to $72,000. |
| 5. | Paid a $13,500dividend to the stockholders. |
| 6. | Determined thatthe market value of the land is $50,000. |
| Required | |
| a. | Record the effects of each accounting event under theappropriate headings for each year. Record the amounts of revenue,expense, and dividends in the Retained Earnings column. Provideappropriate titles for these accounts in the last column of thetable. (Enter any decreases to account balances with aminus sign. Select "NA" if there is no effect on the "AccountTitles for Retained Earnings".) |
| b-1. | Prepare an income statement for each year accounting period. |
| b-2. | Prepare a statement of changes instockholdersâ equity for each year accounting period. |
| b-3. | Prepare a year-end balance sheet for eachyear accounting period. |
| b-4. | Prepare a statement of cash flows for eachyear accounting period. (Amounts to be deducted should beindicated with a minus sign.) |
| c. | Determine theamount of cash that is in the retained earnings account at the endof 2014 and 2015. |
| e. | Determine the balance in the Retained Earnings accountimmediately after Event 2 in 2014 and in 2015 are recorded. |
In addition to presenting the computed answers, please also discuss how you arrived at each answers the accounting problem asks. The accounting problem presents a companyâs balance sheet and income statement. The Diamond Gem Cleaning and Maintenance Service Company is in the business of contracting its cleaning and maintenance services to office buildings. The balance sheet and income statement have blank lines. Determine the values that would be appropriate for each blank line. Provide a narrative of how you arrived at each value. In doing so, explain the account being valued and its relationship to the other financial data. For example, if the accounts payable line was missing, explain that you can derive its value based on knowing all the other values of the current liabilities section. Then explain what an account liability is, as well as why it would belong in the current liabilities section of the balance sheet
Please refer to the income statement and balance sheet of the Diamond Gem Cleaning and Maintenance Service Company available down:
Superior papers will mention and explain the following elements when responding to the assignment question:
Provide correct balances for the blank financial account lines.
Provide a narrative about how the values were determined.
Provide a definition and explanation of each account line that was completed
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