Qise Laover Connary bge it opoai y I, Yoar 2001. Tht fllowrng tamsactios pertain
ID: 2395379 • Letter: Q
Question
Qise Laover Connary bge it opoai y I, Yoar 2001. Tht fllowrng tamsactios pertain to tfe gpertios of Rke Lover Company for the Year XXXI i) Acquired $40,000 cash from issuing common stock i) Performed services for $12,000 cash. ii) Provided $55,000 of services on account. iv) Received $36,000cash in advance for services to be performed over the nest two years (Gie for Yeans XxXx2 andxoxx3) be performed over the next two years (i.e for Years XXX2 andxxx3). v)Incurred $30,000 of other operating expenses on account vi)Collected $45,000 cash from Accounts Receivable. vi) Paid S4,000 cash for rental expense for the year xXXI. viii) Paid S 12,000 (on December 31 ) for one year's prepaid insurance for Year XXX2. ix) Paid $5,000 cash dividend to sharcholders x) Paid $22,000 cash on Accounts Payable Prepare an income statement and cash flow statement for the year XXXI and a balance sheet as of December 31, Year XXXI .Explanation / Answer
(Figure in $) Date Accounts Titles & Explanation Debit Credit i Cash 40,000 Common Stock 40,000 ii Cash 12,000 Service Revenue 12,000 iii Accounts Receivable 55,000 Service Revenue 55,000 iv Cash 36,000 Unearned Service Revenue 36,000 v Operating Expenses 30,000 Accounts Payable 30,000 vi Cash 45,000 Accounts Receivable 45,000 vii Rent Expenses 4,000 Cash 4,000 viii Prepaid Insurance 12,000 Cash 12,000 ix Dividend 5,000 Cash 5,000 x Accounts Payable 22,000 Cash 22,000 Rice Lover Company Income statement For the Year Ended December 31, xxx1 Revenue Service Revenue 67,000 Less: Cost and expenses Operating Cost 30,000 Rent 4,000 34,000 Net Income 33,000 Statement of Owner's Equity For the year ended December 31, xxx1 Retained Earnings, Jan 1 - Add: Net Income / (loss) 33,000 33,000 Less: Dividend 5,000 Retained Earnings, Dec 31 28,000 Balance Sheet December 31, xxx1 Asets Current Assets Cash 90,000 Accounts Receivable 10,000 Prepaid Insurance 12,000 Total Current Assets (a) 112,000 Non- Current Assets Total Non-Current Assets (b) - Total Assets (a + b) 112,000 Liabilities and Stockholders' Equity Current Liabilities Accounts Payable 8,000 Unearned Service Revenue 36,000 Total Current Liabilities (a) 44,000 Non Current Liability Total Non Current Liability (b) - Total Liabilities (c = a + b) 44,000 Stockholders' Equity Capital Stock 40,000 Retained Earnings 28,000 Total Stockholders' Equity (d) 68,000 Total Liabilities and Stockholders' Equity (c+d) 112,000 Cash Flow Statement For the year ended December 31, xxx1 Operating Cash Flows Net income 33,000 Depreciation - Accounts Receivable (10,000) Prepaid Expenses (12,000) Trade Accounts Payable 8,000 Unearned service Revenue 36,000 Total Operating Cash Flows 55,000 Investing Cash Flows Total Investing Cash Flows - Financing Cash Flows Sale of Stock 40,000 Dividend Paid (5,000) Total Financing Cash Flows 35,000 Total Cash Flows 90,000 Cash at the beginning of the Period - Cash at the end of the Period 90,000