Question

Problem 1.33 *Mikes company experienced the following transactions for 2018, its first year of operations and 2019.Assume that all transactions involve the receipt or payment of cash and Problem 1.34   

Chpter1 Probiem 1-33 Transactions for 2018 CHECK FIGURES a. Net Income 2018: $13,000 b. Retained Earnings 2019 1. Acquired $20,.000 by issuing common stock. 2. Received $35,000 cash for providing services to customers 3. Borrowed $25,000 cash from creditors. 4. Paid expenses amounting to $22,000. 5. Purchased land for $30,000 cash. $33,500 Transactions for 2019 Beginning account balances for 2019 are: Cash Land Notes payable Common stock Retained earnings $28,000 30,000 25,000 20.,000 3,000 I. Acquired an additional $24,000 from the issue of common stock. 2. Received $95,000 for providing services 3. Paid $15,000 to creditors to reduce loan. 4. Paid expenses amounting to $71,500. 5. Paid a $3,000 dividend to the stockholders. 6. Determined that the market value of the land is $47,000. Required a. Write an accounting equation, and record the effects of each accounting event under the appropo ate headings for each year. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide appropriate titles for these accounts in the last column of the table. Prepare an income statement, statement of changes in stockholders' equity, year-end balance sheet, and statement of cash flows for each year. Determine the amount of cash that is in the Retained Earnings account at the end of 2018 and 2019 Compare the information provided by the income statement with the information provided by he statement of cash flows. Point out similarities and differences. Determine recorded and after Event 2 in 2019 is recorded. b. c. d. the balance in the Retained Earnings account immediately after Event 2 in 2018 i e. Problem 1-34 Interrelationships among financial statements The bookkeeper reported that Prait paid cash expenses of $26,000 and paid a $2.000 acquired $4,000 of additional cash from the issue of common stock. LO 1-5, 1-7,1-8,1-9 Prat Corp. started the 2018 accounting period with $30,000 of assets (all cash), $12,000 of liabilibies and S13,000 of common stock. During the year, the Retained Earnings account increased by $7,550 CHECK FIGURE a. Net Income 2018: $9,550 Total Assets: $38.550 the stockholders, but she could not find a record of the amount of cash that Pratt received for perf ing services. Pratt also paid $3,.000 cash to reduce the liability owed to the bank, and the basines Required a. Prepare an income statement, statement of changes in stockholders' equity,period-end blano sheet, and statement of cash flows for the 2018 accounting period. (Hint: Determine the anmo of beginning retained earnings before considering the effects of the current period events I might help to record all events under an accounting equation before preparing the b. Determine the percentage of total assets that were provided by creditors, investors, and carning e. Determine the balance in the Revenue, Expense, and Dividends accounts as of January 1. 2019. Round to three decimal places. LO 1-3, 1-4, 1-5, 16, 17, Problem 1-35 Recording events in a horizontal statements model 1-8, 1-9, 1-10 Maben Company was started on January 1,2018, and experienced the followngeentsuin i HECK FIGURES year of operation:

Answer 1

	Problem 1.34
	Figures are in USD otherwise stateed
	Income statement
	Particulars	2018
	Net Sales	35550
	Petty cash expenses	26000
	Net profit	9550
	Dividend	2000
	T/f to retained earnings	7550
	Statement of change in equity
		2018
	Opening balance	13000
	Issued new shares	4000
	Closing balance	17000
	Retained earnings
		2018
	Opening balance	5000
	During the year profits	7550
	Closing blaance	12550
	Cash account
	Opening balance	30,000
Add/(Less)
	Sales	35,550
	Dividend paid	(2,000)
	Operating expenses	(26,000)
	Debt paid	(3,000)
	proceeds from issue of shares	4,000
	Closing balance	38,550
	Debt
		2018
	Opening balance	12000
	Repayment	-3000
	Closing blaance	9000
	Balance Sheet
	Assets	USD	Liabilties	USD	% of assets
	Cash	38,550	Debt	9000	23%
			Common stock	17000	44%
			Retained earnings	12550	33%
	Total	38550	Total	38550