Below are transactions for the month of January, the company's first month of operations: It uses...
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Below are transactions for the month of January, the company's first month of operations: It uses the straight-line method for depreciation and amortization. 1 2 3 4 5 6 7 8 9 10 11 01-Jan 01-Jan 01-Jan 01-Jan 01-Jan 10-Jan 10-Jan 12-Jan 31-Jan Received initial equity financing of £100,000 cash. Took out bank loan of £200,000, with an annual interest rate of 12%. The first interest payment will be made on 1 Feb. Purchased 6 months of prepaid rent for £6,000. Hired its manager at a salary of £ 3,500 per month. Cash salary will be paid on 1 Feb. 31-Jan Purchased a delivery truck for £15,000 cash. Estimated useful life is one year. The compnay expects to sell the truck at the end of one year for £3,000. Received £10,000 advance cash fee from client for consulting engagement. The work will be performed over the next three months. Management determined that the company has satisfied 25% of its 31-Jan performance obligations for its consulting engagement from Jan Purchased 10 units on credit, each costing £5,000. Sold 2 units on credit, for £15,000 each. 10th. The company sells its delivery truck for £10,000 cash Management estimates that £5,000 currently owed to the company by customers is not likely to be collected. a. Record the journal entries for the above transactions. b. Prepare an income statement for January. Ignore tax. c. Prepare a balance sheet as of 31 January. Since this is the first month of operations, beginning balances on 1 January were all zero. d. Prepare a statement of cash flows for the month of January. Use the indirect method for the operating cash flow section. Below are transactions for the month of January, the company's first month of operations: It uses the straight-line method for depreciation and amortization. 1 2 3 4 5 6 7 8 9 10 11 01-Jan 01-Jan 01-Jan 01-Jan 01-Jan 10-Jan 10-Jan 12-Jan 31-Jan Received initial equity financing of £100,000 cash. Took out bank loan of £200,000, with an annual interest rate of 12%. The first interest payment will be made on 1 Feb. Purchased 6 months of prepaid rent for £6,000. Hired its manager at a salary of £ 3,500 per month. Cash salary will be paid on 1 Feb. 31-Jan Purchased a delivery truck for £15,000 cash. Estimated useful life is one year. The compnay expects to sell the truck at the end of one year for £3,000. Received £10,000 advance cash fee from client for consulting engagement. The work will be performed over the next three months. Management determined that the company has satisfied 25% of its 31-Jan performance obligations for its consulting engagement from Jan Purchased 10 units on credit, each costing £5,000. Sold 2 units on credit, for £15,000 each. 10th. The company sells its delivery truck for £10,000 cash Management estimates that £5,000 currently owed to the company by customers is not likely to be collected. a. Record the journal entries for the above transactions. b. Prepare an income statement for January. Ignore tax. c. Prepare a balance sheet as of 31 January. Since this is the first month of operations, beginning balances on 1 January were all zero. d. Prepare a statement of cash flows for the month of January. Use the indirect method for the operating cash flow section.
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Related Book For
Financial Accounting an introduction to concepts, methods and uses
ISBN: 978-0324789003
13th Edition
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
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