Ch 1&2 Exercise ACG2021-Principles of Financial Accounting CH 1: Instructions: R
ID: 2329308 • Letter: C
Question
Ch 1&2 Exercise ACG2021-Principles of Financial Accounting CH 1: Instructions: Record the impact of the following transactions on the Basic Accounting Equation and Cash Flows for a company that began operations on 1/1/2018. Also, categorize the entry as in the Type field: Version 5-1 TYPE COLUMN: Asset Source ISi- Increase Assets and increase claims on Assets (i.e. Liabilities or Equity) Asset Exchange (E)- Increase Assets and decrease other Assets Asset Use (U Decrease Assets and decrease claims on Assets (i.e. Liabilities or Equity) 1) Borrowed $20 cash and signed a note payable in return. 2) Received $80 cash from issuing common stock. 3) Rank received $35 in revenue from performing services. 4) Paid $15 to purchase land. 5) Paid $10 in salaries to Rank's employees 6) Rank paid $5 in cash dividends to its stockholders. Cash Flows Column: OA= Operating Activities A-Investing Activities FA- Financing Activities Balance Sheet Liabilities+ Income Statement Assets Common Retained Net es Income Flow Notes Cash Cash LandPayable Stock Earn Revenues 1) 2) 3) 4) 5) 6) TOTExplanation / Answer
Event Balance sheet Income statement Assets = Liabilities + Equity Cash Land Notes Payable Common stock Retained earnings Revenues - Expenses = Net income Cashflow Type 1 20 20 Yes FA 2 80 80 Yes FA 3 35 35 35 35 Yes OA 4 -15 15 Yes IA 5 -10 -10 10 -10 Yes OA 6 -5 -5 Yes FA Total 105 15 20 80 20 35 10 25 Income statement $ Revenues 35 Less: Expenses 10 Net income 25 Statement of changes in stockholder's equity $ $ Beginning common stock 0 Add: Issuances 80 Ending common stock 80 Beginning retained earnings 0 Add: Net income 25 Less:dividends 5 Ending retained earnings 20 Total stockholder's equity 100 Balance sheet $ $ Assets: Cash 105 Land 15 Total assets 120 Liabilities: Notes payable 20 Equity: Common stock 80 Retained earnings 20 Total stockholder's equity 100 Total liabilities and equity 120 Statement of cashflows $ $ Operating activities: Cash receipt from customers 35 Cash payment for expenses -10 Net cashflow-operating 25 Investing activities: Cash to purchase land -15 Net cashflow-investing -15 Financing activities: Cash from borrowing 20 Cash from issuance of stock 80 Cash used to pay dividends -5 Net cashflow-Financing 95 Net increase in cash 105 Beginning cash balance 0 Ending cash balance 105