Effect of events on financial statements
Caban Company had the following balances in its accounting records as of December 31, 2011:
Assets |
| Claims |
|
Cash | $23,000 | Accounts Payable | $ 5,000 |
Accounts Receivable | 7,000 | Common Stock | 24,000 |
Land | 42,000 | Retained Earnings | 43,000 |
Total | $72,000 | Total | $72,000 |
The following accounting events apply to Caban Company’s 2012 fiscal year:
Jan. 1 Acquired $12,000 cash from the issue of common stock.
Feb. 1 Paid $3,000 cash in advance for a one-year lease for office space.
Mar. 1 Paid a $ 1,000 cash dividend to the stockholders.
April 1 Purchased additional land that cost $28,000 cash.
May 1 Made a cash payment on accounts payable of $2,000.
July 1 Received $5,400 cash in advance as a retainer for services to be performed monthly over the coming year.
Sept. 1 Sold land for $42,000 cash that had originally cost $42,000.
Oct. 1 Purchased $3,000 of supplies on account.
Dec. 31 Earned $35,000 of service revenue on account during the year.
31 Received cash collections from accounts receivable amounting to $40,000.
31 Incurred other operating expenses on account during the year that amounted to $6,000.
31 Recognized accrued salaries expense of $4,800. ,
31 Had $50 of supplies on hand at the end of the period.
31 The land purchased on April 1 had a market value of $30,000.
31 Recognized $800 of accrued interest revenue.
Required
Based on the preceding information, answer the following questions. All questions pertain to the 2012 financial statements. (Hint: Enter items in general ledger accounts under the accounting equation before answering the questions.)
a. Based on the preceding transactions, identify two additional adjustments and describe them.
b. What amount would Caban report for land on the balance sheet?
c. What amount of net cash flow from operating activities would Caban report on the statement of cash flows?
d. What amount of rent expense would Caban report in the income statement?
e. What amount of total liabilities would Caban report on the balance sheet?
f. What amount of supplies expense would Caban report on the income statement?
g. What amount of unearned revenue would Caban report on the balance sheet?
h. What amount of net cash flow from investing activities would Caban report on the statement of cash flows?
i. What amount of total expenses would Caban report on the income statement? j. What amount of service revenue would Caban report on the income statement?
k. What amount of cash flows from financing activities would Caban report on the statement of cash flows?
1. What amount of net income would Caban report on the income statement?
m. What amount of retained earnings would Caban report on the balance sheet?
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