Adams & Co. experienced the following six events in its first year of operations: 1. Shareholders contributed
Question:
Adams & Co. experienced the following six events in its first year of operations:
1. Shareholders contributed $60,000 cash.
2. Purchased land for $30,000 cash.
3. Borrowed $18,000 in cash from a bank.
4. Provided services for $15,000, which will be paid to Smith & Co. next year.
5. Paid $11,000 cash for miscellaneous operating expenses.
6. Paid a $1,000 cash dividend to shareholders.
Required
(a) Using the balance sheet equation as illustrated in this chapter, identify how each of the above six events affected the various accounts involved. Prepare an (b) income statement, (c) a statement of shareholders’ equity, (d) a balance sheet, and (e ) a statement of cash flow for the first year of operations.
(a) Hint - Make sure to enter each expense item as a negative amount for this worksheet.
Adams & Co. | |||||||
---|---|---|---|---|---|---|---|
Transaction: | 1 | 2 | 3 | 4 | 5 | 6 | Balance sheet |
Assets | |||||||
Cash | |||||||
Accounts receivable | |||||||
Land | |||||||
Total assets | |||||||
Liabilities | |||||||
Loan Payable | |||||||
Total liabilities | |||||||
Shareholders' equity | |||||||
Common stock | |||||||
Retained earnings | |||||||
Revenue | |||||||
Operating expense | |||||||
Dividends | |||||||
Total shareholders equity |
(b) Do not use a negative sign with your answers below.
Adams & Co. Income Statement For Year 1 | |
---|---|
Revenue | |
Operating expenses | |
Net Income |
(c)
Adams & Co. Statement of Stockholders Equity For Year 1 | |||
---|---|---|---|
Common Stock | Retained Earnings | Total | |
Beginning balance | |||
Net income | |||
Dividends(enter as negative) | |||
Stock sales | |||
Balance at year-end |
(d)
Adams & Co. Balance Sheet At End of Year 1 | ||||
---|---|---|---|---|
Assets | Liabilities | |||
Cash | Loan payable | |||
Accounts receivable | Total liabilities | |||
Land | ||||
Shareholders' equity | ||||
Common stock | ||||
Retained earnings | ||||
Total shareholders equity | ||||
Total assets | Total liabilities and shareholders equity |
(e) Use a negative sign with answers to indicate a decrease in cash.
Adams & Co. Statement of Cash Flows For Year 1 | |
---|---|
Operating activities | |
Cash flow from operations | |
Investing activities | |
Cash flow from investing | |
Financing activities | |
Bank loan | |
Common stock | |
Dividend payment | |
Cash flow from financing | |
Change in cash | |
Cash, beginning of year | |
Cash, end of year |
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward