The following account balances are provided for Modern Communications, Inc. at July 31, 2017: Balance $...

 

Transcribed Image Text:

The following account balances are provided for Modern Communications, Inc. at July 31, 2017: Balance $ 250,000 Cash Accounts receivable 170,000 Interest receivable 150 Investments 38,000 Spare parts and supplies Prepaid insurance Equipment (net) Accounts payable 40,000 36,000 486,850 84,000 Interest payable Salaries payable 300 36,000 Unearned revenue 40,000 Bank loan due October 1, 2018 426,000 Common stock (no par) Retained earnings 350,000 84,700 All August 2017 transactions follow: 1. Provided services on account for a total of $395,000. 2. Customers redeemed gift cards for $18,000 in services. 3. Used $16,000 in parts and supplies. 4. Sold an investment costing $8,000 for $5,000 cash. 5. Paid accounts payable of $67,000. 6. Collected $206,000 on customer accounts. 7. Issued common stock for $75,000. 8. Purchased $35,000 of equipment in exchange for a note payable due on March 1, 2018. 9. Paid $86,000 for employee services. $36,000 was for July services and $9,000 was for services to be performed in September. 10. Received a $1,200 bill for August utilities. 11. Paid $2,350 for August radio advertisements. 12. Received an interest payment $450 including the interest accrued at 7/31/2017. 13. Paid $9,000 for August rent. Required: a. Prepare T-accounts for each of the accounts provided. Enter beginning balances. Record each of the August transactions in the T-accounts and calculate ending balance for each account. Create new accounts as necessary. b. Calculate cash flows from operations for the month ending August 31, 2017. c. Prepare a classified income statement for the month of August in good form. The following account balances are provided for Modern Communications, Inc. at July 31, 2017: Balance $ 250,000 Cash Accounts receivable 170,000 Interest receivable 150 Investments 38,000 Spare parts and supplies Prepaid insurance Equipment (net) Accounts payable 40,000 36,000 486,850 84,000 Interest payable Salaries payable 300 36,000 Unearned revenue 40,000 Bank loan due October 1, 2018 426,000 Common stock (no par) Retained earnings 350,000 84,700 All August 2017 transactions follow: 1. Provided services on account for a total of $395,000. 2. Customers redeemed gift cards for $18,000 in services. 3. Used $16,000 in parts and supplies. 4. Sold an investment costing $8,000 for $5,000 cash. 5. Paid accounts payable of $67,000. 6. Collected $206,000 on customer accounts. 7. Issued common stock for $75,000. 8. Purchased $35,000 of equipment in exchange for a note payable due on March 1, 2018. 9. Paid $86,000 for employee services. $36,000 was for July services and $9,000 was for services to be performed in September. 10. Received a $1,200 bill for August utilities. 11. Paid $2,350 for August radio advertisements. 12. Received an interest payment $450 including the interest accrued at 7/31/2017. 13. Paid $9,000 for August rent. Required: a. Prepare T-accounts for each of the accounts provided. Enter beginning balances. Record each of the August transactions in the T-accounts and calculate ending balance for each account. Create new accounts as necessary. b. Calculate cash flows from operations for the month ending August 31, 2017. c. Prepare a classified income statement for the month of August in good form.

Answer rating: 100% (QA)

14 Cash Accounts Receivable Interest Receivable Beg Bal 250000 67000 5 Beg Bal 170000 206000 6 Beg Bal 150 150 12 4a 5000 86000 9 1 395000 6 206000 2350 11 12 450 9000 13 End Bal 297100 End Bal 359000 ... View the full answer