Question

During Year 1, Chung Corporation earned $8,000 of cash revenue and accrued $5,000 of salaries expense. Required Based on this information alone: (Hint Record the events in general ledger accounts under an accounting equation before satisfying the requirements) (Enter any decreases to account balances with a minus sign.) CHUNG CORPORATION Accounting Equation - Year 1 Assets Liabilities Stockholders' Equity Salaries Common Retained Payable Stock Earnings Event Cash Eamed revenue Accrued salaries Ending balance

Answer 1

a)
	Event	Asset	=	Liabilities	+	Stockholders Equity
		Cash	=	Salaries Payable		Common Stock	Retained Earnings
	Earned Revenue	$        8,000	=		+		$                     8,000
	Accrued Salaries		=	$                   5,000	+		$                   -5,000
	Ending Balance	$        8,000	=	$                   5,000	+		$                     3,000
	Balance Sheet
	Assets
	Cash		$        8,000
	Total		$        8,000
	Liabilities
	Salaries Payable		$        5,000
	Total Liabilities		$        5,000
	Stockholders Equity
	Capital		$               -
	Ratained Earning		$        3,000
	Total Stockholders Equity		$        3,000
	Total Equity and liabilities		$        8,000
b)	Net Income
	Sales Revenue	$        8,000
	Less:
	Salary Expenses	$        5,000
	Net Income	$        3,000
c)	Amount of net cash flow from operating activities
	Sales Revenue	$        8,000
	net cash flow from operating activities	$        8,000