CHAPTER 1 Introduction to Accounting and Business
Prob. 1–3A (Concluded)
4. (Optional)
Cash flows from operating activities:
Cash received from customers $110,000
Deduct cash payments for expenses
RELIANCE FINANCIAL SERVICES
Statement of Cash Flows
For the Month Ended July 31, 2016
CHAPTER 1 Introduction to Accounting and Business
Prob. 1–4A
1.
=+
+=+ – + –– –– –
(a) + 25,000 + 25,000
(b) + 1,850 + 1,850
Bal. 25,000 1,850 1,850 25,000
(c) – 1,200 – 1,200
Bal. 23,800 1,850 650 25,000
(d) + 41,500 + 41,500
Cash Dividends
Auto
Exp.
Assets Stockholders’ Equity
Supplies
Accts.
Payable
Liabilities
Common
Stock
Sales
Comm.
Salaries
Exp.
Supplies
Exp.
Misc.
Exp.
Rent
Exp.
CHAPTER 1 Introduction to Accounting and Business
Prob. 1–4A (Concluded)
2.
Sales commissions $41,500
Expenses:
Salaries expense $5,000
Retained earnings, July 1, 2016 $0
Cash $48,050 Accounts payable $ 650
Supplies 950
Stockholders’ Equity
HALF MOON REALTY
Income Statement
For the Month Ended July 31, 2016
HALF MOON REALTY
Retained Earnings Statement
For the Month Ended July 31, 2016
HALF MOON REALTY
Balance Sheet
July 31, 2016
Assets Liabilities
CHAPTER 1 Introduction to Accounting and Business
Prob. 1–5A
1. = + Stockholders’ Equity
Cash +++
=+
Common
Stock +
Retained
Earnings
Supplies Land
Accounts
Payable
Assets
Accounts
Receivable
Liabilities
CHAPTER 1 Introduction to Accounting and Business
Prob. 1–5A (Continued)
2. =+
Retained
(e) + 2,500 + 2,500
Bal. 56,125 93,000 9,500 125,000 42,500 95,000 120,000
(f) – 22,800 – 22,800
Bal. 33,325 93,000 9,500 125,000 19,700 95,000 120,000
(g) + 84,750
Stockholders’ Equity
Accts.
Assets
Accts.
Liabilities
Common
CHAPTER 1 Introduction to Accounting and Business
Prob. 1–5A (Continued)
+–
–
–– – – –
Bal.
(a)
Bal.
(b)
Bal.
(c) + 32,125
Bal. 32,125
(d) – 6,000
Bal. 32,125 – 6,000
Stockholders’ Equity (Continued)
Utilities
Exp.
Supplies
Exp.
Dry
Cleaning
Revenue
Dry
Cleaning
Exp.
Wages
Exp.
Rent
Exp.
Truck
Exp.
Misc.
Exp.
3.
Dry cleaning revenue $116,875
Expenses:
Dry cleaning expense $29,500
Wages expense 7,500
Retained earnings, July 1, 2016 $120,000
Net income for July $63,775
Cash $ 95,325 Accounts payable $ 49,200
Accounts receivable 89,750
Supplies 5,900
Assets Liabilities
Stockholders’ Equity
D’LITE DRY CLEANERS
Income Statement
For the Month Ended July 31, 2016
D’LITE DRY CLEANERS
Retained Earnings Statement
For the Month Ended July 31, 2016
D’LITE DRY CLEANERS
Balance Sheet
July 31, 2016
4. (Optional)
Cash flows from operating activities:
Cash received from customers* $120,125
Deduct cash payments for expenses
and payments to creditors** (42,800)
Net cash flows from operating activities $ 77,325
Cash flows used for investing activities:
D’LITE DRY CLEANERS
Statement of Cash Flows
For the Month Ended July 31, 2016
CHAPTER 1 Introduction to Accounting and Business
Prob. 1–6A
a. Fees earned, $750,000 ($275,000 + $475,000)
b. Supplies expense, $30,000 ($475,000 – $300,000 – $100,000 – $20,000 – $25,000)
c. Retained earnings, April 1, 2016, $0; Wolverine Realty was organized on
April 1, 2016.
d. Net income for April, $275,000 from income statement
e. $150,000 ($275,000
–
$125,000)
f. Retained earnings, April 30, 2016, $150,000
CHAPTER 1 Introduction to Accounting and Business
Prob. 1–1B
1.
Assets = +
+ +=+ –+ –––– –
(a) + 50,000 + 50,000
(b) + 4,000 + 4,000
Bal. 50,000 4,000 4,000 50,000
Bal. 52,550 4,000 1,700 50,000 13,800 – 5,000 – 2,500 – 1,150 – 300
(h) – 1,300 – 1,300
Bal. 52,550 2,700 1,700 50,000 13,800 – 5,000 – 2,500 – 1,300 – 1,150 – 300
(i) + 12,500 + 12,500
Bal. 52,550 12,500 2,700 1,700 50,000 26,300 – 5,000 – 2,500 – 1,300 – 1,150 – 300
(j) – 3,900 – 3,900
Bal. 48,650 12,500 2,700 1,700 50,000 – 3,900 26,300 – 5,000 – 2,500 – 1,300 – 1,150 – 300
2. Stockholders’ equity is the right of stockholders (owners) to the assets of the business. These rights are increased by issuing common stock and
revenues and decreased by dividends and expenses.
4. March’s transactions increased retained earnings by $12,150 ($16,050 – $3,900), which is the excess of March’s net income of $16,050
over dividends of $3,900.
Cash Dividends
Supplies
Expense
Stockholders’ Equity
Accts.
Rec. Supplies
Accts.
Payable
Liabilities
Common
Stock
Fees
Earned
Salaries
Expense
Auto
Exp.
Misc.
Exp.
Rent
Expense
CHAPTER 1 Introduction to Accounting and Business
Prob. 1–2B
1.
Fees earned $875,000
Expenses:
Wages expense $525,000
Rent expense 75,000
Utilities expense 38,000
Supplies expense 12,000
2.
Retained earnings, May 1, 2015 $145,000
3.
Cash $146,000 Accounts payable $ 25,000
Accounts receivable 210,000
Supplies 9,000
For the Year Ended April 30, 2016
WILDERNESS TRAVEL SERVICE
WILDERNESS TRAVEL SERVICE
Income Statement
For the Year Ended April 30, 2016
WILDERNESS TRAVEL SERVICE
Retained Earnings Statement
Balance Sheet
April 30, 2016
Assets Liabilities
Stockholders’ Equity
CHAPTER 1 Introduction to Accounting and Business
Prob. 1–3B
1.
Fees earned $125,000
Expenses:
Salaries expense $58,000
Rent expense 27,000
Auto expense 15,500
Supplies expense 6,100
Miscellaneous expense 7,500
Total expenses 114,100
Net income $ 10,900
2.
3.
BRONCO CONSULTING
Income Statement
For the Month Ended August 31, 2016
BRONCO CONSULTING
Retained Earnings Statement
BRONCO CONSULTING
Balance Sheet
August 31, 2016
Assets Liabilities
4. (Optional)
Cash flows from operating activities:
Cash received from customers $ 92,000
BRONCO CONSULTING
Statement of Cash Flows
For the Month Ended August 31, 2016
CHAPTER 1 Introduction to Accounting and Business
Prob. 1–4B
1.
=+
+=+ –+ –––– –
(a) + 24,000 + 24,000
(b) – 3,600 – 3,600
Bal. 20,400 24,000 – 3,600
(c) – 1,950 – 1,350 – 600
Bal. 18,450 24,000 – 3,600 – 1,350 – 600
(d) + 1,200 + 1,200
Bal. 18,450 1,200 1,200 24,000 – 3,600 – 1,350 – 600
Cash Dividends
Auto
Exp.
Assets Stockholders’ Equity
Supplies
Accts.
Payable
Liabilities
Common
Stock
Sales
Comm.
Salaries
Exp.
Supplies
Exp.
Misc.
Exp.
Rent
Exp.
2.
Sales commissions $19,800
Expenses:
Rent expense $3,600
Salaries expense 2,500
Retained earnings, April 1, 2016 $0
Cash $31,500 Accounts payable $ 450
Supplies 300
Assets Liabilities
Stockholders’ Equity
CUSTOM REALTY
Income Statement
For the Month Ended April 30, 2016
CUSTOM REALTY
Retained Earnings Statement
For the Month Ended April 30, 2016
CUSTOM REALTY
Balance Sheet
April 30, 2016
CHAPTER 1 Introduction to Accounting and Business
Prob. 1–5B
1. Liabilities +
Accounts
Accounts
Common
Retained
Assets
=
Stockholders’ Equity