Sage Inc. experienced the following transactions for Year 1, its first year of operations: 1. Issued common
Question:
Sage Inc. experienced the following transactions for Year 1, its first year of operations:
1. Issued common stock for $50,000 cash.
2. Purchased $140,000 of merchandise on account.
3. Sold merchandise that cost $110,000 for $250,000 on account.
4. Collected $236,000 cash from accounts receivable.
5. Paid $118,000 on accounts payable.
6. Paid $50,000 of salaries expense for the year.
7. Paid other operating expenses of $28,000.
8. Sage adjusted the accounts using the following information from an accounts receivable aging schedule:
Required
a. Organize the transaction data in accounts under an accounting equation.
b. Prepare the income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for Sage Inc. for Year 1.
c. What is the net realizable value of the accounts receivable at December 31, Year 1?
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Step by Step Answer:
Introductory Financial Accounting for Business
ISBN: 978-1260299441
1st edition
Authors: Thomas Edmonds, Christopher Edmonds