During Year 2, Rustic Camp Sites experienced the following transactions:

1. RCS acquired $44,000 cash by issuing common stock.

2. RCS received $128,000 cash for providing services to customers (leasing campsites).

3. RCS paid $25,000 cash for salaries expense.

4. RCS paid a $10,200 cash dividend to the owners.

5. RCS sold land that had cost $112,000 for $112,000 cash.

6. RCS paid $59,000 cash for other operating expenses.

A. Record the transaction data in a horizontal financial statements model. In the Cash Flow column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The beginning balances have been recorded as an example. Note that the revenue and expense accounts have a zero beginning balance. Amounts in these accounts apply only to a single accounting period. Revenue and expense account balances are not carried forward from one accounting period to the next.

B. What amount of net income will RCS report on the Year 2 income statement?

C. What amount of total assets will RCS report on the December 31, Year 2, balance sheet?

D. What amount of retained earnings will RCS report on the December 31, Year 2, balance sheet?

E. What amount of net cash flow from operating activities will RCS report on the Year 2 statement of cash flows?

Assets	Assets	Liabilities	stockholder equity	stockholder equity
Cash	Land	notes payable	common stock	retained earnings
63,000	632,000	520,000	132,000	43,000

Answer rating: 100% (QA)

Solution A Horizontal Financial Statements Model Transaction Account Titles Effects Debit Credit ... View the full answer