Exercise $1-21$

Preparing an income statement for a company

P$2$

BMW Group, one of Europe's largest manufacturers, reports the following income statement accounts for the year ended December $31($euros in millions$).$ Use

this information to prepare BMW$\text{'}$s income statement for the year ended December $31.$

Problem $1-9$A

Analyzing transactions and preparing financial statements

C$4$ P$1$ P$2$

Sanyu Sony started a new business and completed these transactions during December.

Dec. $1$ Sanyu Sony transferred $$65,000$ cash from a personal savings account to a checking account in the name of Sony Electric.

$2$ The company rented office space and paid $$1,000$ cash for the December rent.

$3$ The company purchased $$13,000$ of electrical equipment by paying $$4,800$ cash and agreeing to pay the $$8,200$ balance in $30$ days.

$5$ The company purchased office supplies by paying $$800$ cash.

$6$ The company completed electrical work and immediately collected $$1,200$ cash for these services.

$8$ The company purchased $$2,530$ of office equipment on credit.

$15$ The company completed electrical work on credit in the amount of $$5,000.$

$18$ The company purchased $$350$ of office supplies on credit.

$20$ The company paid $$2,530$ cash for the office equipment purchased on December $8.$

$24$ The company billed a client $$900$ for electrical work completed; the balance is due in $30$ days.

$28$ The company received $$5,000$ cash for the work completed on December $15.$

$29$ The company paid the assistant's salary of $$1,400$ cash for this month.

$30$ The company paid $$540$ cash for this month's utility bill.

$31$ Sanyu Sony withdrew $$950$ cash from the company for personal use.

Required

Create the following table similar to the one in Exhibit $1\mathrm{.}7.$

Use additions and subtractions within the table to show the dollar effects of each transaction on individual items of the accounting equation. Show new

balances after each transaction.

Check $(1)$ Ending balances: Cash, $$59,180$; Accounts Payable, $$8,550$

Prepare the income statement and the statement of changes in equity for the current month, and the balance sheet as of the end of the month.

$(2)$ Net profit, $$4,160$; Total assets, $$76,760$

Prepare the statement of cash flows for the current month.

Analysis Component

Assume that the owner investment transaction on December $1$ was $$49,000$ cash instead of $$65,000$ and that Sony Electric obtained another $$16,000$ in cash

by borrowing it from a bank. Compute the dollar effect of this change on the month$-$end amounts for $($a$)$ total assets, $($b$)$ total liabilities, and $($c$)$ total equity.