Question

On January 1, 2018, Jana started a small flower merchandising business that she named Jane's Flowers. The company experienced the following events during the first year of operation: 1. Started the business by issuing common stock for $41,000 cash. 2. Pald $27,000 cash to purchase Inventory 3. Sold merchandise that cost $19,000 for $40,000 on account. 4. Collected $36,000 cash from accounts receivable. 5. Pald $9,300 for operating expenses. Required a. Organize ledger accounts under an accounting equation and record the events in the accounts. In the last column of the table. provide appropriate account titles for the Retained Earnings amounts. b-1. Prepare an Income statement b-2. Prepare a balance sheet, b-3.Prepare a statement of cash flows. c. Since Jana sold Inventory for $40,000, she will be able to recover more than half of the $41,000 she invested in the stock. Do you agree with this statement? Answer is not complete. Complete this question by entering your answers in the tabs below. Red A Reg B1 Req B2 Req 83 Reg C Prepare a statement of cash flows. (Amounts to be deducted should be indicated the messig.) JANA'S FLOWERS Statement of Cash Flows For the Year Ending December 31, 2018 Cash flows from operating activities Inflow from customers Outflow for inventory De

Answer 1

a.

Liabilities Account titles for retained earning Accounts Receivable + Shareholder's Equity Common Stock + Retained Earnings 41,000 + + + + Janes flowers Effect of events on financial statements Events Assets Cash Inventory+ 1 41,000 2 (27,000) + 27,000 3 (19,000) + 3b 4 36,000 5 (9,300) + + + + + + (19,000) Cost of goods Sold 40,000 Sales + + + + 40,000 (36,000) + + + + + + + + (9,300) Operating expense Closing Balance 40,700 + 8,000 + 4,000 + 41,000 + 11,700

B 1

Income Statement for the year ended 31st Decemeber 2018 Revenue from Operations Cost of Goods sold Gross Profit Operating expenses Net profit Other comprehensive income Total comprehensive income for the period 40,000 (19,000) 21,000 (9,300) 11,700 11,700

B2

Balance Sheet Assets Non-Current Asset 52,700 Current Asset Cash Inventory Accounts Receivable 40,700 8,000 4,000 Total Assets 52,700 Equities and Liabilities 52,700 Owner's Equity Equity Retained Earnings 41,000 11,700 Non-Current Liability Current Liability Total Equity and Liabilities 52,700

B3

Statement of cash flow for the year ended 31st december 2018 Cash Flow from operating Activities Cash Paid to purchase Inventory Cash received from customers Cash paid for Operating expense (27,000) 36,000 (9,300) Total Cash outflow from operating activities (300) Cash Flow from investing activities Cash Flow from financing activities Cash Inflow from issue of common stock 41,000 Cash inflow from financing activities 41,000 Cash Balance at the end of the year 40,700