Question

In Year 1, Lee Inc. billed its customers $56,300 for services performed. The company collected $40,400 of the amount billed. Lee incurred $36,300 of other operating expenses on account. Lee paid $24,400 of the accounts payable. Lee acquired $23,000 cash from the issue of common stock. The company invested $19,000 cash in the purchase of land. Required (Hint: Identify the six events described in the paragraph and record them in general ledger accounts under an accounting equation before attempting to answer the questions.) Use the preceding information to answer the following questions: a. What amount of revenue will Lee report on the Year 1 income statement? b. What amount of cash flow from revenue will be reported on the statement of cash flows? c. What is the net income for the period? d. What is the net cash flow from operating activities for the period? f. What is the amount of net cash flow from investing activities? g. What is the amount of net cash flow from financing activities? h. What amounts of total assets, liabilities, and equity will be reported on the year-end balance sheet? Complete this question by entering your answers in the tabs below. Accoing Equation Reg A to H What amount of revenue will Lee report on the Year 1 Income statement? What amount of cash flow from revenue will be reported on the statement of cash flows? What is the net income for the period? What is the net cash flow from operating activities for the period? (Enter cash outflows as negative amounts.) What is the amount of net cash flow from investing activities? (Enter cash outflows as negative amounts.) What is the amount of net cash flow from financing activities? (Enter cash outflows as negative amounts.) What amounts of total assets, liabilities, and equity will be reported on the year-end balance sheet? Show less $ b Revenue recognized Cash flow from revenue Net income 56,300 40.400 $ G

Answer 1

1. Revenue to be recognized = $56300

2. The amount of cash flow from revenue will be reported on the statement of cash flows is the amount which is actually received from the customers i.e., $40400

3.Net Income to be reported :

Particulars	Amount ($)
Revenue	56300
Less: Expenses	(36300)
Net Income	20000

4. Net Cash flows from Operating Activities :

Particulars	Amount ($)
Revenue received in Cash	40400
Less: Creditors paid in cash for operating expenses	(24400)
Net Operating Cash flows	16000

5. Net Cash flows from Investing Activities :

Purchased Land (Cashout flow)= (19000)

6. Net Cash flow from financing activities :

Common Stock issued = 23000

7. Balance Sheet Values

Total Assets = $54900

1. Cash = 16000 - 19000 + 23000 = 20000

2. Accounts Receivable = 56300-40400 = 15900

3. Land = 19000

Total Liabilities = $11900

Accounts Payable = 36300-24400 = 11900

Total Equity = 43000

1. Common Stock = 23000

2. Net Income = 20000

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