California Mining began operations by issuing common stock for ($ 100,000). The company paid ($ 90,000) cash
Question:
California Mining began operations by issuing common stock for \(\$ 100,000\). The company paid \(\$ 90,000\) cash in advance for a one-year contract to lease machinery for the business. The lease agreement was signed on March 1, 2011, and was effective immediately. California Mining received \(\$ 115,000\) of cash revenue in 2011.
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, 2011.
c. Record all 2011 events in a horizontal statements model like the following one:
d. What amount of net income would California Mining report on the 2011 income statement? What is the amount of net cash flow from operating activities for 2011 ?
e. Determine the amount of prepaid rent California Mining would report on the December 31, 2011, balance sheet.
Step by Step Answer: