Common stock 30,000
Retained earnings 3,500
Total stockholders' equity 33,500
Total liabilities and stockholders' equity $ 33,500
References
Essay Learning Objective: 01-04 Show
how business events affect the
accounting equation.
Difficulty: 2 Medium Learning Objective: 01-07
Prepare an income statement, a
statement of changes in
stockholders equity, and a
balance sheet.
62.
Award: 10.00 points
63.
Award: 10.00 points
During Year 1, Sawyer Company earned $42,000 of cash revenue and paid $28,200 of cash expenses and $1,600 in dividends to the company's stockholders.
Enter each of these three events into the horizontal financial statements model, below. Indicate dollar amounts of increases and decreases. For cash flows,
show whether they are operating activities (OA), investing activities (IA), or financing activities (FA). Enter 0 if there would be no entry in a column.
Event Assets = Liabilities + Equity Revenue − Expense = Net Income Cash Flow
a)
b)
c)
Event Assets = Liabilities + Equity Revenue − Expense = Net Income Cash Flow
a) 12,000 NA 12,000 12,000 NA 12,000 12,000 OA
b) (8,200) NA (8,200) 8,200 (8,200) (8,200)OA
c) (600) NA (600) NA NA (600)FA
References
Essay Difficulty: 2 Medium Learning Objective: 01-10 Record business events using a horizontal
financial statements model.
During Year 1, Pace Company issued common stock to stockholders for $12,000, purchased land for $3,200 cash, and paid cash dividends of $1,000 to the
company's stockholders. Enter each of these three events into the horizontal financial statements model, below. Indicate dollar amounts of increases and
decreases. For cash flows, show whether they are operating activities (OA), investing activities (IA), or financing activities (FA). Enter 0 if there would be no entry
in a column.
Event Assets = Liabilities + Equity Revenue − Expense = Net Income Cash Flow
a)
b)
c)
Event Assets = Liabilities + Equity Revenue − Expense = Net Income Cash Flow
a) 12,000 0 12,000 0 0 0 12,000 FA
b) (3,200) 0 0 0 0 0 (3,200)IA
(3,200) 0 0 0 0 0 0
c) (1,000) 0 (1,000) 0 0 (1,000)FA
References
Essay Difficulty: 2 Medium Learning Objective: 01-10 Record business events using a horizontal
financial statements model.
64.
Award: 10.00 points
During Year 1, Moersch Company issued common stock to stockholders for $10,000; purchased land for $2,000 cash; provided services to customers for
$8,000; paid cash operating expenses of $6,200; and paid cash dividends of $1,000 to the company's stockholders. Enter each of these events into the
horizontal financial statements model, below. Indicate dollar amounts of increases and decreases. For cash flows, show whether they are operating activities
(OA), investing activities (IA), or financing activities (FA). Enter 0 if there would be no entry in a column.
Event Assets = Liabilities + Equity Revenue − Expense = Net Income Cash Flow
a)
b)
c)
d)
e)