Marilyn Miller opened a floral shop using $30,000 of her own cash savings and $90,000 in cash borrowed from her parents.
She signed a lease on a small store for one year, agreeing to pay $2,100 per month in rent. During the first year of operations, Marilyn purchased fresh flowers from a local nursery for $15,000, paid $7,200 for utilities, and generated floral sales totaling $72,000.
(Assume all transactions were cash transactions). Marilyn was hoping to be able to repay her parent's one-half of the borrowed money at the end of the first year of operations.
(a) Enter each of the above events into the balance sheet equation as illustrated in the chapter.
(b)Prepare an income statement, ( c) a balance sheet, and (d) a statement of cash flow for the floral shop.

(a) Enter each of the above events into the balance sheet equation as illustrated in the chapter.
Hint - For this worksheet, make sure to enter all expense items as negative amounts.

Transaction:	Issue stock	Borrow cash	Pay rent	Purchase flowers	Pay utilities	Floral sales	Balance sheet
Assets
Cash	$	$	$	$	$	$	$
Total assets							$
Liabilities
Loan Payable	$	$	$	$	$	$	$
Total liabilities							$
Shareholders' equity
Common stock	$	$	$	$	$	$	$
Retained earnings							$
Revenue	$	$	$	$	$	$
Lease expense	$	$	$	$	$	$
Floral expense	$	$	$	$	$	$
Utilities expense	$	$		$	$	$
Total shareholders equity							$

(b) Do not use negative signs with answers below.

Floral Shop
Income Statement
For Year 1

Revenue

$

Expenses:

Lease expense

Answer

$

Floral expense

Answer

$

Utilities expense

Answer

$

Net Income

$

(c)

Floral Shop
Balance Sheet
At End of Year 1

Assets

Liabilities

Cash

$

Loan payable

$

Total liabilities

$

Shareholders' equity

Common stock

$

Retained earnings

$

Total shareholders equity

Answer

$

$

Total liabilities and shareholders equity

Answer

$

(d) Use negative signs with answers to indicate a decrease in cash.

Floral Shop
Statement of Cash Flows
For Year 1

Operating activities

Revenue

$

Lease expense

$

Floral expense

Answer

$

Utilities expense

$

Cash flow from operations

$

Investing activities

Cash flow from investing

$

Financing activities

Common stock issuance

$

Loan payable

$

Cash flow from financing

$

Change in cash

$

cash, the beginning of year

Cash, end of year

$

Answer rating: 100% (QA)

Completing the Financial Statements for Marilyns Floral Shop Transaction Entries a Use the following ... View the full answer