Question

Exercise 1-19A Preparing financial statements LO 1-7, 1-8, Dakota Company experienced the following events during 2018: 1. Acquired $25,000 cash from the issue of common stock. 2. Paid $20,000 cash to purchase land. 3. Borrowed $20,000 cash. 4. Provided services for $60,000 cash. 5. Paid $2,000 cash for utilities expense. 6. Paid $40,000 cash for other operating expenses. 7. Paid a $5,000 cash dividend to the stockholders. 8. Determined that the market value of the land purchased in Event 2 is now $25,000. Required a. The January 1, 2018, general ledger account balances are shown in the following accounting equation. Record the eight events in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example. b-1. Prepare an income statement for the 2018 accounting period. b-2. Prepare a statement of changes in equity for the 2018 accounting period. b-3. Prepare a year-end balance sheet for the 2018 accounting period. b-4. Prepare a statement of cash flows for the 2018 accounting period. c. Determine the percentage of assets that were provided by retained earnings. Can you determine the cash in retained earnings?

Answer 1

29 30 Assets Cash + Liabilities + Notes Payable + Event Land 31 32 Stockholder's Equity Common Stock + Retained Account Titles for Earnings Retained Earnings 33 + = + + Balance 1/1/2018 1 25000 + + 25000 + 34 35 36 2 -20000 + + 20000 = + + 3 + 20000 + + 20000 60000 37 4 + = + + 38 5 -2000 + + + N/A N/A N/A 60000 Service Revenue -2000 Utilities expense - 40000 Operating expenses -5000 Dividends N/A 13000 6 + + + + 39 40 -40000 -5000 7 + + + 41 8 + + + 42 Totals 38000 + 20000 38000 + 25000 + 43 44 45 Note; No beginning balances were given in the question, therefore I have assumed O For event 8th no entry is necessary 46 47