Question

10 Part 4 167 points Required information Problem 3-32A Comprehensive problem: single cycle LO 3-1, 3-2, 3-3, 3.4 The following information applies to the questions displayed below) The following transactions pertain to Smith Training Company for Yeart Jan. 3 Established the business when it acquired $47,000 cash from the issue of comon stock. Feb. Paid rent for office space for two years, $15,700 cash. Apr. 10 Purchased 5790 of supplies on account. July 1 Received $24,500 cash in advance for services to be provided over the next year. Aug. 15 Billed a custoner $10,con for services provided during August. Sept. 15 Completed a job and received $2,900 cash for services rendered. Oct. 1 Paid ero lovee salaries of $32,000 cash 15 Received 50,410 cash from accounts receivable Nov. 16 Billed customers $39.500 for services rendered on account. 31 Adjusted records to recognize the services provided on the contract of July 1. 31 Recorded 52,200 of accrued salaries as of December 31 31 Recorded the rent expense for the year. (See February 1. 31 Physically counted supplies: 5120 was on hand at the end of the period. B References Problem 3-32A Part d d. Prepare an income statement statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1 (Round your final answers to the nearest whole dollar amount. Statement of Cash Flows only. items to be deducted must be indicated with a negative amount.)

Answer 1

Solution:

Requirement D(i) SMITH TRAINING COMPANY Income Statement For the Year Ended December 31, Year 1 $ 64,650 Service Revenue Expenses: Rent Expense Salaries Expense Supplies Expense Total Expenses Net Income $ $ $ 7,196 34,200 670 $ $ 42,066 22,584

Requirement D(ii) SMITH TRAINING COMPANY Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 1 Total Common Retained Stockholders' Stock Earnings Equity Beginning Balance $ $ $ Issue of Common Stock $ 47,000 $ 47,000 Dividends $ -800 $ -800 Net Income $ 22,584 $ 22,584 Ending Balance $ 47,000 $ 21,784 $ 68,784

Requirement D(iii) SMITH TRAINING COMPANY Balance Sheet December 31, Year 1 Assets Cash Accounts Receivable Prepaid Rent Supplies $ $ $ $ 33,707 41,100 8,504 120 Total Assets $ 83,431 197 $ $ $ 12,250 2,200 Liabilities Accounts Payable Unearned Service Revenue Salaries Payable Total Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity $ 14,647 $ $ 47,000 21,784 $ 68,784 Total Liabilities & Stockholders' Equity $ 83,431

35,800 -47,700 -593 Requirement D(iv) SMITH TRAINING COMPANY Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flow from Operating Activities: Received from Customers $ Paid for Expenses ($15,700 + $32,000) $ Paid for Supplies $ Net cash flow from Operating Activities Cash flow from Investing Activities: Cash flow from Financing Activities: Paid for Dividends $ Received from Stock Issue $ Net cash flow from Financing Activities Net Changes in cash Add: Beginning cash balance Ending Cash balance -12,493 $ $ -800 47,000 $ 46,200 33,707 $ $ $ $ 33,707

Credit Requirement E Closing Journal Entry Date General Journal Dec-31 Service Revenue Income Summary (Record the entry to close revenue account) Debit 64,650 $ $ 64,650 $ 42,066 Dec-31 Income Summary Rent Expense Salaries Expense Supplies Expense (Record the entry to close expense account) $ $ $ 7,196 34,200 670 $ 22,584 Dec-31 Income Summary Retained Earnings (Record the entry to close income summary) 22,584 $ 800 Dec-31 Retained Earnings Dividends (Record entry to close dividends a/c) $ 800

Credit Requirement F SMITH TRAINING COMPANY Post-Closing Trial Balance December 31, Year 1 Account Titles Cash Accounts Receivable Supplies Prepaid Rent Accounts Payable Unearned Service Revenue Salaries Payable Common Stock Retained Earnings $ $ $ $ Debit 33,707 41,100 8,504 120 $ $ $ $ $ 197 12,250 2,200 47,000 21,784 Totals $ 83,431 $ 83,431