P3–3
SAN MATEO HEALTH CARE INC.
Income Statement
For the Month Ended January 31, 20Y6
Fees earned …………………………………………………………… $ 72,000
Operating expenses:
Wages expense …………………………………………………. $33,900
SAN MATEO HEALTH CARE INC.
Statement of Stockholders’ Equity
For the Month Ended January 31, 20Y6
Common Stock Retained Earnings Total
Bal. Jan. 1 ……………………………. $50,000 $237,500 $287,500
Issued common stock …………… 10,000 10,000
Net income …………………………… 19,100 19,100
P3–3, Concluded
SAN MATEO HEALTH CARE INC.
Balance Sheet
January 31, 20Y6
Assets
Current assets:
Cash …………………………………………………….. $ 37,000
Accounts receivable ……………………………… 69,500
Total assets ……………………………………………….. $ 370,000
Liabilities
Current liabilities:
Accounts payable …………………………………. $ 4,500
P3–4
1. SAN MATEO HEALTH CARE INC.
Statement of Cash Flows
For the Month Ended January 31, 20Y6
Cash flows from operating activities:
Cash received from customers …………………………… $ 74,000*
Cash paid for expenses ……………………………………… (59,000)**
Net cash flows from operating activities …………….. $ 15,000
2. Net income …………………………………………………………….. $ 19,100
Depreciation ………………………………………………………….. $ 2,300
Changes in noncash current operating
assets and liabilities:
P3–5
Total
Net Total Total Stockholders’
Income Assets Liabilities Equity
Reported amounts $ 127,500 $480,000 $ 150,000 $ 330,000
Corrections:
P3–6
1.
Financial Statement Effects
Balance Sheet
Assets = Liabilities +Stockholders’ Equity
Laundry Prepaid Laundry Acc. Accts. Wages Common Retained
Cash +Supplies +Ins. +Equip. –Depr. = Payable +Payable +Stock + Earnings
Balances, Dec. 31, 20Y8 53,000 9,000 6,000 250,000 (65,000) 7,000 0 50,000 196,000
31. (a) 2,150 (2,150) (a)
Statement of Cash Flows Income Statement
Operating (Revenues) 275,000 Laundry revenue 275,000
Financing (Common Stock) 25,000 Wages expense (110,000)
Operating (Expenses) (200,000) Rent expense (30,000)
Investing (Equipment) (50,000) Utilities expense (18,000)
P3–6, Continued
2. MS. ELLEN’S LAUNDRY INC.
Income Statement
For the Year Ended December 31, 20Y8
Laundry revenue ……………………………………………………. $ 275,000
Operating expenses:
Wages expense …………………………………………………. $112,150
MS. ELLEN’S LAUNDRY INC.
Statement of Stockholders’ Equity
For the Year Ended December 31, 20Y8
Common Stock Retained Earnings Total
P3–6, Continued
3. MS. ELLEN’S LAUNDRY INC.
Balance Sheet
December 31, 20Y8
Assets
Current assets:
Cash …………………………………………………………………. $ 53,000
Liabilities
Current liabilities:
P3–6, Concluded
4. MS. ELLEN’S LAUNDRY INC.
Statement of Cash Flows
For the Year Ended December 31, 20Y8
Cash flows from operating activities:
Cash received from customers …………………………… $ 275,000