Cash payment for expense (55,100)
Net cash flow from operating activities 10,400
Cash flows for investing activities
Cash payment for land (15,000)
Cash flows from financing activities
Cash receipt from loan 10,500
Cash receipt from stock issue 48,000
Cash dividend paid to stockholders (4,000)
Net cash flow from financing activities 54,500
Net increase in cash 49,900
Plus: Beginning cash balance 0
Ending cash balance $ 49,900
References
Essay Learning Objective: 01-04 Show
how business events affect the
accounting equation.
Difficulty: 3 Hard Learning Objective: 01-08
Prepare a statement of cash
flows.
55.
Award: 10.00 points
Fill in the missing information by determining the amounts represented by letters a - d.
Income Statement
Revenue $ a
Expense 6,200
Net income $ b
Statement of Changes in Stockholders' Equity
Beginning common stock $ 0
Plus: Issuance of common stock 11,000
Ending common stock 11,000
Beginning retained earnings $ 0
Add: net income 3,500
Ending retained earnings $ c
Total stockholders' equity $ d
a) $9,700, b) $3,500, c) $3,500, d) $14,500
Explanation:
Solve in the following order:
b. $3,500 (given in statement of changes in stockholders' equity)
a. $3,500 + $6,200 = $9,700
c. $0 + $3,500 = $3,500
d. $11,000 + $3,500 = $14,500
References
Essay Difficulty: 2 Medium Learning Objective: 01-07 Prepare an income statement, a
statement of changes in stockholders equity, and a balance sheet.
56.
Award: 10.00 points
Fill in the blanks indicated by the alphabetic letters in the following financial statements. These financial statements were prepared for the company's first year
of operations, and all transactions were for cash.
Income Statement
Service revenue $ 44,000
Operating expenses a
Net income $ b
Statement of Changes in Stockholders' Equity
Beginning common stock $80,000
Add: Common stock issued 0
Ending common stock 80,000
Beginning retained earnings 0
Add: Net income c
Less: Dividends d
Ending retained earnings 16,000
Total stockholders' equity $ e
Balance Sheet
Assets:
Cash $ f
Land 20,000
Total assets $120,000
Liabilities $ g
Stockholders' equity:
Common stock 80,000
Retained earnings h
Total stockholders' equity i
Total liabilities and stockholders' equity $120,000
Statement of Cash Flows
Cash flows from operating activities:
Cash receipt from revenue $ 44,000
Cash payment for expense j
Net cash flow from operating activities k
Cash flows for investing activities
Cash payment for land (20,000)
Net Cash flows for investing activities (20,000)
Cash flows from financing activities
Cash receipt from loan 1
Cash receipt from stock issue 80,000
Cash dividend paid to stockholders (12,000)
Net cash flow from financing activities 92,000
Net increase in cash $ 100,000
Solve for "l" first: l + 80,000 − 12,000 = 92,000; l = 24,000
Next, solve for "k": k − 20,000 + 92,000 = 100,000; k = 28,000
Next, solve for "j": 44,000 − j = 28,000; j = 16,000
Next, solve for "a": a = j; a = 16,000
Next, solve for "b": 44,000 − 16,000 = b; b = 28,000
Next, solve for "c": c = b; c = 28,000
Next, solve for "d": 0 + 28,000 − d = 8,000; d = 12,000 (can also be taken from statement of cash flows)
Next, solve for "e": 80,000 + 16,000 = 96,000
Next, solve for "f": f + 20,000 = 120,000; f = 100,000
Next, solve for "h": h = 8,000 (taken from statement of changes in stockholders' equity)
Next, solve for "i": 80,000 + 16,000 = i; i = 96,000
Last, solve for "g": g + 96,000 = 120,000; g = 24,000
References
Essay Learning Objective: 01-07
Prepare an income statement, a
statement of changes in
stockholders equity, and a
balance sheet.
Difficulty: 3 Hard Learning Objective: 01-08
Prepare a statement of cash
flows.
57.
Award: 10.00 points
The following transactions apply to the Garber Corporation for Year 1, its first year in business.
1. The company issued stock to investors, $48,000.
2. The company borrowed $42,000 cash from the bank.
3. Services were provided to customers and $50,000 cash was received from those customers.
4. The company acquired land for $44,000.
5. The company paid $34,000 rent for the building in which it operates its business.
6. The company paid $3,200 for supplies that were used during the period.