Green Corporation is a fictitious retail garden nursery. You have been provided the December 31, 2019...
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Green Corporation is a fictitious retail garden nursery. You have been provided the December 31, 2019 balance sheet for Green Corporation, as well as a narrative of transactions that occurred during 2020. Using this information, prepare a December 31, 2020 balance sheet, and an income statement and indirect method statement of cash flows for the year ended December 31, 2020. Note that you will need to make some adjusting entries to account for what occurred with the passage of time (such as the part of the insurance policy being used up by year's end). Use the appropriate spreadsheet tabs to input your work. While not required, I recommend starting this exercise by filling in the pre-fab t-accounts in the "T-accounts" tab. A3 4 5 6 Assets 7 Current 8 Cash fx = 12 Green Corporation Balance Sheet December 31, 2019 9 Accounts Receivable 10 Inventory 11 Total Current Assets Property and Equipment (net of $30,000 accumulated depreciation) 13 Total Assets 14 15 Liabilities and Shareholders' Equity 16 Current 17 Accounts Payable 18 Salary Payable 19 Total Current Liabilities 20 10% Long-Term Note Payable 21 Total Liabilities 22 Common Stock 23 Retained Earnings 24 Total Liabilities and Shareholders' Equity 25 26 B 3,000 2,000 10,000 15,000 50,000 65,000 26,000 4,000 30,000 20,000 50,000 10,000 5,000 65,000 Relevant information for 2020 28 1. On June 30, 2020, Green Corp. paid $2,000 in cash for a 2-year fire insurance policy covering the period June 30, 2020 to June 30, 2022. 27 2. On November 1, 2020, Green Company made the decision to expand into a new location and entered into a one-year rental contract covering the period November 1, 2020 to November 1, 2021. Under 29 the new rent contract, Green agreed to pay $10,000 rent on the first day of each month. (Hint: Assume that Green Company complied with this agreement and paid the $10,000 in cash on the first day of each month.) 30 3. Green paid $50,000 in cash to purchase new equipment. 31 4. Equipment with a historical cost of $15,000 and accumulated depreciation of $3,000 was sold for $14,000 in cash. 32 5. Depreciation was $5,000 for the year. 33 6. Green made merchandising sales of $250,000 during the year. All sales were on account (i.e., credit sales). 34 7. Collections of accounts receivable totaled $231,000 cash for the year. 35 8. Purchases of inventory totaled $113,000 for the year. All purchases were on account (on credit). 36 9. The company counted inventory at year-end and determined the ending inventory balance to be $5,000. 10. Payments to suppliers for purchases on account totaled $111,000 37 in cash. 38 11. On December 31, 2020, Green repaid the 10% note, along with accrued interest, by paying the bank $22,000 cash. 39 12. On December 31, 2020, Green issued a new 8% note. Proceeds from the note were $11,000. 13. Also on December 31, 2020, Green issued 5,000 shares of common equity. Each share yielded $5 in proceeds. 14. $23,000 in cash was paid during the year for salaries to employees 41 and the ending balance in salaries payable on Dec. 31, 2020 was $2.000 40 42 15. Cash payments for other operating expenses totaled $500. 43 16. Green paid dividends of $3,000 during the year. 44 17. Green operates in a tax-free jurisdiction. (Are they lucky or what?) 45 2 1 5 S 7 # 9 10 11 12 11 14 13 16 17 18 19 20- 21 BB EB Cash (A) BB EB Green Corporation T-Accounts Accounts Receivable (A) BB EB Inventory (A) AY 26 21 20 29 11 11 14 35 5 17 # M 40 41 43 M 45 M 47 A BB EB T &M- Green Corporation D Prepaid Insurance (A) Accounts Payable (L) 1 BB EB G BB EB H Property and Equipment, Gross (A) Salary Payable (1) BB EB L M BB EB Q Accumulated Depreciation (XA) N 8% Note Payable (L) BB EB BB R EB 52 33 54 33 54 ST 58 19 60 41 C KE 64 85 M 67 71 72 71 26 2 X Green Corporation D C 10% Note Payable (L) Sales Revenue (SE,R) E BB EB F G H Common Stock (SE) Cost of Goods Sold (SE,E) K BB EB M N 0 Retained Earnings (SE) Salaries Expense (SE,E) 0 BB EB 76 77 78 79 10 81 22 11 M 25 M 67 18 n 90 91 92 93 94 95 36 97 90 99 100 101 102 C 0 Gain on Equipment Sale (SE.R) Other Expense (SE.E) G H K Depreciation Expense (SE.E) Insurance Expense (SE.E) M N 0 P Interest Expense (SE.E) Rent Expense (SEE) Q 1 2 3 4 Green Corporation Balance Sheets as of December 31, 5 6 Assets 7 Current 8 Cash 9 Accounts Receivable 10 Prepaid Insurance 11 Inventory 12 Total Current Assets 13 Property and Equipment (net of accumulated depreciation) 14 Total Assets 15 16 Liabilities & Shareholders' Equity 17 Current 18 Accounts Payable 19 Salary Payable 20 Total Current Liabilities: 21 10% Note Payable 22 Total Liabilities 23 Common Stock 24 Retained Earnings 25 Total Liabilities and Shareholders' Equity 26 2020 2019 3,000 2,000 10,000 15,000 50,000 65,000 26,000 4,000 30,000 20,000 50,000 10,000 5,000 65,000 1 2 3 $ 5 69 7 8 00 9212345 10 11 16 17 18 1872222 19 20 23 24 25 Green Corporation Income Statement For the Year Ended December 31, 2020 B 1 2 3 4 5 6 7 00 8 9 10 11 12 13 14 15 5678985 16 17 18 19 20 21 22 23 24 A Green Corporation Statement of Cash Flow - indirect method For the Year Ended December 31, 2020 B Green Corporation is a fictitious retail garden nursery. You have been provided the December 31, 2019 balance sheet for Green Corporation, as well as a narrative of transactions that occurred during 2020. Using this information, prepare a December 31, 2020 balance sheet, and an income statement and indirect method statement of cash flows for the year ended December 31, 2020. Note that you will need to make some adjusting entries to account for what occurred with the passage of time (such as the part of the insurance policy being used up by year's end). Use the appropriate spreadsheet tabs to input your work. While not required, I recommend starting this exercise by filling in the pre-fab t-accounts in the "T-accounts" tab. A3 4 5 6 Assets 7 Current 8 Cash fx = 12 Green Corporation Balance Sheet December 31, 2019 9 Accounts Receivable 10 Inventory 11 Total Current Assets Property and Equipment (net of $30,000 accumulated depreciation) 13 Total Assets 14 15 Liabilities and Shareholders' Equity 16 Current 17 Accounts Payable 18 Salary Payable 19 Total Current Liabilities 20 10% Long-Term Note Payable 21 Total Liabilities 22 Common Stock 23 Retained Earnings 24 Total Liabilities and Shareholders' Equity 25 26 B 3,000 2,000 10,000 15,000 50,000 65,000 26,000 4,000 30,000 20,000 50,000 10,000 5,000 65,000 Relevant information for 2020 28 1. On June 30, 2020, Green Corp. paid $2,000 in cash for a 2-year fire insurance policy covering the period June 30, 2020 to June 30, 2022. 27 2. On November 1, 2020, Green Company made the decision to expand into a new location and entered into a one-year rental contract covering the period November 1, 2020 to November 1, 2021. Under 29 the new rent contract, Green agreed to pay $10,000 rent on the first day of each month. (Hint: Assume that Green Company complied with this agreement and paid the $10,000 in cash on the first day of each month.) 30 3. Green paid $50,000 in cash to purchase new equipment. 31 4. Equipment with a historical cost of $15,000 and accumulated depreciation of $3,000 was sold for $14,000 in cash. 32 5. Depreciation was $5,000 for the year. 33 6. Green made merchandising sales of $250,000 during the year. All sales were on account (i.e., credit sales). 34 7. Collections of accounts receivable totaled $231,000 cash for the year. 35 8. Purchases of inventory totaled $113,000 for the year. All purchases were on account (on credit). 36 9. The company counted inventory at year-end and determined the ending inventory balance to be $5,000. 10. Payments to suppliers for purchases on account totaled $111,000 37 in cash. 38 11. On December 31, 2020, Green repaid the 10% note, along with accrued interest, by paying the bank $22,000 cash. 39 12. On December 31, 2020, Green issued a new 8% note. Proceeds from the note were $11,000. 13. Also on December 31, 2020, Green issued 5,000 shares of common equity. Each share yielded $5 in proceeds. 14. $23,000 in cash was paid during the year for salaries to employees 41 and the ending balance in salaries payable on Dec. 31, 2020 was $2.000 40 42 15. Cash payments for other operating expenses totaled $500. 43 16. Green paid dividends of $3,000 during the year. 44 17. Green operates in a tax-free jurisdiction. (Are they lucky or what?) 45 2 1 5 S 7 # 9 10 11 12 11 14 13 16 17 18 19 20- 21 BB EB Cash (A) BB EB Green Corporation T-Accounts Accounts Receivable (A) BB EB Inventory (A) AY 26 21 20 29 11 11 14 35 5 17 # M 40 41 43 M 45 M 47 A BB EB T &M- Green Corporation D Prepaid Insurance (A) Accounts Payable (L) 1 BB EB G BB EB H Property and Equipment, Gross (A) Salary Payable (1) BB EB L M BB EB Q Accumulated Depreciation (XA) N 8% Note Payable (L) BB EB BB R EB 52 33 54 33 54 ST 58 19 60 41 C KE 64 85 M 67 71 72 71 26 2 X Green Corporation D C 10% Note Payable (L) Sales Revenue (SE,R) E BB EB F G H Common Stock (SE) Cost of Goods Sold (SE,E) K BB EB M N 0 Retained Earnings (SE) Salaries Expense (SE,E) 0 BB EB 76 77 78 79 10 81 22 11 M 25 M 67 18 n 90 91 92 93 94 95 36 97 90 99 100 101 102 C 0 Gain on Equipment Sale (SE.R) Other Expense (SE.E) G H K Depreciation Expense (SE.E) Insurance Expense (SE.E) M N 0 P Interest Expense (SE.E) Rent Expense (SEE) Q 1 2 3 4 Green Corporation Balance Sheets as of December 31, 5 6 Assets 7 Current 8 Cash 9 Accounts Receivable 10 Prepaid Insurance 11 Inventory 12 Total Current Assets 13 Property and Equipment (net of accumulated depreciation) 14 Total Assets 15 16 Liabilities & Shareholders' Equity 17 Current 18 Accounts Payable 19 Salary Payable 20 Total Current Liabilities: 21 10% Note Payable 22 Total Liabilities 23 Common Stock 24 Retained Earnings 25 Total Liabilities and Shareholders' Equity 26 2020 2019 3,000 2,000 10,000 15,000 50,000 65,000 26,000 4,000 30,000 20,000 50,000 10,000 5,000 65,000 1 2 3 $ 5 69 7 8 00 9212345 10 11 16 17 18 1872222 19 20 23 24 25 Green Corporation Income Statement For the Year Ended December 31, 2020 B 1 2 3 4 5 6 7 00 8 9 10 11 12 13 14 15 5678985 16 17 18 19 20 21 22 23 24 A Green Corporation Statement of Cash Flow - indirect method For the Year Ended December 31, 2020 B
Expert Answer:
Answer rating: 100% (QA)
Journal Entries for the year Particulars Debit Credit Prepaid Insurance 1500 Insurance Expense 500 Cash 2000 2000 insurance paid for 30 June 2020 30 Jun 2022 Expense for this year 2000 x 6 months 2 x ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0470161012
9th Canadian Edition, Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
Posted Date:
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