Question

Virginia Mining began operations by issuing common stock for $150,000. The company paid $135,000 cash in advance for a one-year contract to lease machinery for the business. The lease agreement was signed on March 1, 2016, and was effective immediately. Virginia Mining received $172,500 of cash revenue in 2016.
Required
a. Record the March 1 cash payment in general journal format.
b. Record in general journal format the adjustment required as of December 31, 2016.
c. Record all 2016 events in a horizontal statements model like the following one:
d. What amount of net income would be reported on the 2016 income statement? What is the amount of net cash flow from operating activities for 2016?
e. Determine the amount of prepaid rent that would be reported on the December 31, 2016, balance sheet.


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  • CreatedApril 20, 2015
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