Question

a. Refer to Problem 2-41B (below). Use an Excel spreadsheet to construct the required financial statements. To complete Requirement b, use formulas where normal arithmetic calculations are made within the financial statements (in particular the statement of changes in stockholders' equity). The following accounts and balances were drawn from the records of Shearer Company at December 31, Year 2: Cash $22,100 $21,000 Accounts receivable Cash flow from operating act. 43,000 8,600 2,500 5,000 Beginning retained earnings Beginning common stock 47,200 5,500 Land Insurance expense Dividends Prepaid insurance Accounts payable Supplies 3,500 86,000 15,000 2,100 Service revenue Cash flow from financing act. Ending common stock Cash flow from investing act. Other operating expenses 9,000 14,500 Supplies expense Rent expense 1,000 3,500 (6,000) 59,000

Answer 1

Income Statement for the Period Dec.31, Year 2 Amount Serive revenue 86000 Total revenue 86000 less: opera ling expense Rent expense 3500 Insurance expense 2500 Supplies expense 1000 59000 other operating Total Operating Net Income expense expense 66000 20000

Statement of changes of changes in stockholders equity for the Period Dec.31, year. (Amount) Starling common Slock Add: Additional Capital 5500 9000 14500 47200 Ending common stock Beginning retained earnings Add: net income less : Dividend 20000 5000 G2200 Ending detained earnings 76700 Total Stockholders equity

Balance sheet as of Dec. 31, Yeox 2 Amount Assels Current assets : Cash 22100 21000 Ccounts receivable Prepaid insurance 3500 Supplies 2100 Total current Assets 48700 on - Current Assets Land 43000 43000 91700 15000 15000 Total non-current Assets | Total Assets I Liabilities Current liabilities __Accounts Payable Total current liabilibies Non- cuxoent liabilities long - Leom liabili bes Tobal long-term liabilities stock holders equity - Ending Common Stock Ending retained earnings Total Slock holders equity Total liabilities and Stockholders equily. 14 500 62200 76700 91700

statement flow for the Period Dec. 31, year 2 of cash Camount) - Cash flow from operating activities 8600 6ooo Cash flow Cash flow Net change from from in investing activities financing activities cash 9000 11600