Rios Company had the following balances in its accounting records as of December 31, 2006: The following
Question:
Rios Company had the following balances in its accounting records as of December 31, 2006:
The following accounting events apply to Rios's 2007 fiscal year:
Jan. 1 Acquired an additional \($40,000\) cash from the issue of common stock.
April 1 Paid \($5,400\) cash in advance for a one-year lease for office space.
June 1 Paid a \($2,000\) cash dividend to the stockholders.
July 1 Purchased additional land that cost \($25,000\) cash.
Aug. 1 Made a cash payment on accounts payable of \($10,000\).
Sept. 1 Received \($7,200\) cash in advance as a retainer for services to be performed monthly during the next eight months.
Sept. 30 Sold land for \($22,000\) cash that had originally cost \($22,000.
Oct.\) 1 Purchased \($900\) of supplies on account.
Dec 31 Earned \($60,000\) of service revenue on account during the year.
31 Received \($56,000\) cash collections from accounts receivable.
31 Incurred \($12,000\) other operating expenses on account during the year.
31 Recognized accrued salaries expense of \($5,000\).
31 Had \($150\) of supplies on hand at the end of the period.
31 The land purchased on July 1 had a market value of \($28,000\).
Required:
Based on the preceding information, answer the following questions. All questions pertain to the 2007 financial statements.
a. What two additional adjusting entries need to be made at the end of the year?
b. What amount would be reported for land on the balance sheet?
c. What amount of net cash flow from operating activities would Rios report on the statement of cash flows?
d. What amount of rent expense would Rios report in the income statement?
e. What amount of total liabilities would Rios report on the balance sheet?
f. What amount of supplies expense would Rios report on the income statement?
g. What amount of unearned revenue would Rios report on the balance sheet?
h. What amount of net cash flow from investing activities would Rios report on the statement of cash flows?
i. What amount of total expenses would Rios report on the income statement?
j. What total amount of service revenues would Rios report on the income statement?
k. What amount of cash flows from financing activities would Rios report on the statement of cash flows?
l. What amount of net income would Rios report on the income statement?
m. What amount of retained earnings would Rios report on the balance sheet?
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