MBA560 Financial and Managerial Accounting: Module 1 Homework (P1-30 and P2-32)

Reminder: Please make sure to reword or paraphrase written essay answers; do not submit our tutorial as your own work. 

MBA560 Financial and Managerial Accounting 
Module 1 Homework 

P1-30 Preparing the financial statements for two complete accounting cycles 
Webster Consulting experienced the following transactions for 2012, its first year of operations, and 2013. Assume that all transaction involve the receipt or payment of cash. 
Transactions for 2012: 
1. Acquired $20,000 by issuing common stock. 
2. Received $35,000 cash for providing services to customers. 
3. Borrowed $25,000 cash from creditors. 
4. Paid expenses amounting to $22,000. 
5. Purchased land for $30,000 cash. 

Transactions for 2013: 
Beginning account balances for 2013 are: 
Cash 28,000 
Land 30,000 
Notes payable 25,000 
Common stock 20,000 
Retained earnings 13,000 

1. Acquired an additional $24,000 from the issue of common stock. 
2. Received $95,000 for providing services. 
3. Paid $15,000 to creditors to reduce loan. 
4. Paid expenses amounting to $71,500. 
5. Paid a $3,000 dividend to the stockholders. 
6. Determined that the market value of the land is $47,000. 

Required: 
a. Write an accounting equation and record the effects of each accounting event under the appropriate account headings for each year. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide appropriate titles for these accounts in the last columns of the table. 
b. Prepare an income statement, statement of changes in stockholders' equity, year-end balance sheet, and statement of cash flows for each year. 
c. Determine the amount of cash that is in the retained earnings account at the end of 2012 and 2013. 
d. Examine the balance sheets for the two years. How did assets change from 2012 to 2013. 
e. Determine the balance in the Retained Earnings account immediately after Event 2 in 2012 and 2013 are recorded.

P2-32 Identifying and arranging elements on financial statements 
The following information was drawn from the records of Paso &  Associates at December 31, 2012. 
Supplies 2,500 
Consulting revenue 120,000 
Land 70,000 
Dividends 10,000 
Cash flow from fin. Activities 30,000 
Interest revenue 6,000 
Ending retained earnings 50,100 
Cash 66,000 
Interest payable 4,000 
Interest expense 9,000 
Unearned revenue 5,400 
Notes payable 40,000 
Salaries payable 9,000 
Salary expense 58,000 
Common stock issued 30,000 
Beginning common stock 40,000 
Accounts receivable 32,000 
Cash flow from inv. Activities (21,000) 
Cash flow form oper. Activities 18,000 
Prepaid rent 8,000 

Required 
Use the preceding information to construct an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows. (show only the totals for each activity on the statement of cash flows).
Powered by