CHICC Stuart Manufacturing Company experienced the following accounting events during its first year of operation. With...

Transcribed Image Text:

CHICC Stuart Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared in accordance with GAAP. 1. Acquired $58,000 cash by issuing common stock. 2. Paid $7,300 for the materials used to make its products, all of which were started and completed during the year. 3. Paid salaries of $3,600 to selling and administrative employees. 4. Paid wages of $6,400 to production workers. 5. Paid $5,100 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,200 estimated salvage value and a three-year useful life. 6. Paid $11,800 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,300 estimated salvage value and a three-year useful life. 7. Sold inventory to customers for $26,600 that had cost $13,500 to make. Required Indicate how these events would affect the balance sheet and income statement by recording them in a horizontal financial statements model as indicated here. The first event is recorded as an example. (Enter any decreases to account balances with a minus sign. For changes on the Statement of Cash Flows, indicate whether the item is an operating activity (OA), investing activity (IA), financing activity (FA).) Event No. 1 2 3 4 5a 5b 6a 6b 7a 7b Total Cash 58,000. + 58,000 Assets Inventory + 0 Balance Sheet BV Manuf. Equip. 0 BV Office Furn. Stockholders' Equity Ret. Common stock Ear 58,000+ 58,000+ 0 Rey. Income Statement Exp. 0 Net Inc. 0 Cash Flow 58,000 58,000 FA CHICC Stuart Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared in accordance with GAAP. 1. Acquired $58,000 cash by issuing common stock. 2. Paid $7,300 for the materials used to make its products, all of which were started and completed during the year. 3. Paid salaries of $3,600 to selling and administrative employees. 4. Paid wages of $6,400 to production workers. 5. Paid $5,100 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,200 estimated salvage value and a three-year useful life. 6. Paid $11,800 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,300 estimated salvage value and a three-year useful life. 7. Sold inventory to customers for $26,600 that had cost $13,500 to make. Required Indicate how these events would affect the balance sheet and income statement by recording them in a horizontal financial statements model as indicated here. The first event is recorded as an example. (Enter any decreases to account balances with a minus sign. For changes on the Statement of Cash Flows, indicate whether the item is an operating activity (OA), investing activity (IA), financing activity (FA).) Event No. 1 2 3 4 5a 5b 6a 6b 7a 7b Total Cash 58,000. + 58,000 Assets Inventory + 0 Balance Sheet BV Manuf. Equip. 0 BV Office Furn. Stockholders' Equity Ret. Common stock Ear 58,000+ 58,000+ 0 Rey. Income Statement Exp. 0 Net Inc. 0 Cash Flow 58,000 58,000 FA

Answer rating: 100% (QA)

Answer Solution Assets Equity Income Statement Cash Flow Event Cash Inventory Manuf Equip Off... View the full answer