Question

Workshop 2 Problems Student Q Search Shoot + Review View AA. Doo Home Insert Page Layout Formulas Data P . X cut Calibri (Body) 12 . A A Copy Paste format B IU. . .A AG X fx 1 9 Wrap Text General $ . % Morge & Center. ) Conditional Format Check Cell Insert Delete Format Formatting as Table Clear M N L Points: 24 hems1 pt. each - 24 points total 1 2.6 Recording transactions in the Accounting Equation and Financial Statements 2 Background information Donald Duck and Friends had the following events 3 in 2015 6 7 R 5 Ever Description of Event 1 Performed dry cleaning services for $40,000 cash 2 On February 1, 2018. ad $20,000 cash to rent office space for the coming year 3 Adjusted the counts for the amount of rent used during the year 10 al Complete the accounting .ation for the different transactions Denaid and Friends Camcurry Accounting Equation 14 Event Stockholders Equity Betained Gaming + Prepaid Rent 16 1 Total 22 Prepare an incom m ent for 2018 Donald Duck and Friends Income Statement For the Year Ended December 31.2018 Donald Duck and Friends Balance Sheet As of December 31.2015 41 Total Assets 45 Stockholders Equity 48 Total Stockholders Fouily 49 Total Liabides and Stockholsters Equity 21,667 21,667 $ Problem 2.1 Problem 2.2 Problem 2.3 Problem 24 Problem 2.5 Problem 2.6 + Ready Average: 1 Count: 2 Sum: 1 E M -- + 100%
Can anyone help me? Help me understand

Answer 1

Part a)

The accounting equation for different transactions is complete as below:

Donald and Friends Company
Accounting Equation
Event		Assets				Stockholder's Equity
		Cash	+	Prepaid Rent	=	Retained Earnings
1		40,000	+	0	=	40,000
2		-20,000	+	20,000	=	0
3		0	+	-18,333 (20,000*11/12)	=	-18,333
Total		$20,000		$1,667	=	$21,667

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Part 2)

The income statement for 2018 is given as follows:

Donald and Friends Company
Income Statement
For the Year Ended December 31, 2018
Revenues	40,000
Less Expenses	-18,333
Net Income	$21,667

______

Part 3)

The year-end balance sheet is given as below:

Donald Duck and Friends
Balance Sheet
As of December 31, 2018
Assets
Cash	20,000
Prepaid Rent	1,667
Total Assets		$21,667
Liabilities	0
Total Liabilities	0
Stockholder's Equity
Retained Earnings	21,667
Total Stockholder's Equity		21,667
Total Liabilities and Stockholder's Equity		$21,667

______

Part 4)

The cash flow statement is prepared as follows:

Donald Duck and Friends
Statement of Cash Flows
As of December 31, 2018
Cash Flow from Operating Activities
Cash Receipt from Revenue	40,000
Cash Payment for Rent	-20,000
Net Cash Flow from Operating Activities		20,000
Cash Flow from Investing Activities		0
Cash Flow from Financing Activities		0
Net Change in Cash		20,000
Plus: Beginning Cash Balance		0
Ending Cash Balance		$20,000