Articulation Exercise

Listed below are selected account balances for Moby Corporation at December 31, Year 2 and Year 1. Also available for you is selected information from the income statement for Moby for the year ended December 31, Year 2.

Selected balance sheet accounts: Year 2 Year 1

Assets:

Accounts Receivable $18 $22

Prepaid Salaries 8 7

Prepaid Rent 3 5

Property, Plant & Equipment 310 283

(Accumulated Depreciation) (75) (68)

Investments 26 24

Liabilities & Stockholders

Equity:

Salaries Payable 12 9

Unearned Sales Rev. 4 1

Notes Payable 39 34

Dividends Payable 6 4

Contributed Capital 32 24

Retained Earnings 42 39

Selected income statement information for the year ended December 31, Year 2:

Sales revenue $74

Depreciation 18

Salaries Expense 27

Gain on sale of equipment 7

Loss on sale of investments 3

Net Income 21

Additional information:

1. During Year 2, Property, Plant & Equipment costing $26 was sold causing a gain.
2. During Year 2, $22 of Notes Payable were issued in exchange for Property, Plant and Equipment. This involves an exchange of Notes Payable for Property, Plant and Equipment.
3. During Year 2, the firm sold Investments for $8 cash.

Required: Determine the correct dollar amounts for each of the following items. Place your answers in the spaces provided.

1. Cash paid for salaries in Year 2. $_________
2. Payments for the purchase of Investments in Year $_________

3. Notes Payable paid off in Year 2. $_________

4. Cash dividends paid in Year 2 $_________
5. Cash received from the sale of Property, Plant and Equipment in Year 2 $_________
6. Cash paid for Property, Plant & Equipment in Year 2 $_________

7. Cash collected from customers in Year 2 $_________