Question: Problem 1-35 Recording events in a horizontal statements model CHECK FIGURES a. Net Income: $23,000 e. Net Cash Flow from Operating Activities: $23,000 Maben Company
Problem 1-35 Recording events in a horizontal statements model
CHECK FIGURES
a. Net Income: $23,000
e. Net Cash Flow from Operating Activities: $23,000
Maben Company was started on January 1, 2018, and experienced the following events during its first year of operation:
Acquired $30,000 cash from the issue of common stock.
Borrowed $40,000 cash from National Bank.
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Earned cash revenues of $48,000 for performing services.
Paid cash expenses of $25,000.
Paid a $1,000 cash dividend to the stockholders.
Acquired an additional $20,000 cash from the issue of common stock.
Paid $10,000 cash to reduce the principal balance of the bank note.
Paid $53,000 cash to purchase land.
Determined that the market value of the land is $75,000.
Required
Record the preceding transactions in the horizontal statements model. Also, in the Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first event is shown as an example.
PROBLEM 1-35
a.
| Maben Company Horizontal Statements Model for 2018 | ||||||||||||||||||
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| Balance Sheet |
| Income Statement |
| Statement of | ||||||||||||
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| Assets | = | Liab. | + | Stockholders Equity |
| Revenue | - | Expense | = | Net Inc. |
| Cash Flows | ||||
| Event No. |
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Cash |
+ |
Land |
= | Notes Payable |
+ | Common Stock |
+ | Retained Earnings |
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| 1 |
| 30,000 | + | NA | = | NA | + | 30,000 | + | NA |
| NA | - | NA | = | NA |
| 30,000 FA |
| 2 |
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| + |
| = |
| + |
| + |
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| - |
| = |
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| 3 |
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| + |
| = |
| + |
| + |
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| - |
| = |
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| 4 |
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| + |
| = |
| + |
| + |
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| - |
| = |
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| 5. |
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| + |
| = |
| + |
| + |
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| - |
| = |
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| 6. |
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| + |
| = |
| + |
| + |
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| - |
| = |
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| 7. |
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| + |
| = |
| + |
| + |
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| - |
| = |
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| 8. |
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| + |
| = |
| + |
| + |
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| - |
| = |
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| 9. |
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| + |
| = |
| + |
| + |
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| - |
| = |
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| Total |
| $ | + | $ | = | $ | + | $ | + | $ |
| $ | - | $ |
| $ |
| $ |
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b. Total Assets = $ + $ = $
c.
| Sources of Assets | |
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| $ |
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| Total Sources of Assets | $ |
PROBLEM 1-35 (cont.)
d. Net income $ .
e.
| Operating Activities: | |
| Cash from revenue | $ |
| Cash paid for expenses |
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| Net Cash Flow from Operating Activities | $ |
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| Investing Activities: | |
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| $ |
| Net Cash Flow from Investing Activities | $ |
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| Financing Activities: | |
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| $ |
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| Net Cash Flow from Financing Activities | $ |
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f. Percentage of assets is provided as follows:
Investors ($ $ ) . %
Creditors ($ $ ) . %
Earnings ($ $ ) . %
g.
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