Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter 1, Problem 7PSB
Summary Introduction
Introduction: Cash Flow Analysis is a technique used by the company to know the overall worth of the company as well as its subsidiary or branches. Cash flow analysis helps in analyzing the company’s
To determine: asset liability and equity table.
Expert Solution
Answer to Problem 7PSB
The year ended balance of cash account for $130,060, account receivable account for $675 equipment accounts for $2400 account payable account for 0 common stock account for $1300000 dividend account for $4000 revenue account for $16925 and the expenses account for $9790
Explanation of Solution
| Assets | Liabilities | Equity | ||||||
| Date(June) | Cash | Account Receivable | Office Equipment | Account Payable | Common Stock | Dividends | Revenue | Expenses |
| 1 | 130,000 | 130,000 | ||||||
| 2 | -6,000 | 6,000 | ||||||
| 4 | 2400 | 2400 | ||||||
| 6 | 1150 | 1,150 | ||||||
| 8 | 850 | 850 | ||||||
| 14 | 7500 | 7,500 | ||||||
| 16 | 800 | 800 | ||||||
| 20 | 7,500 | -7500 | ||||||
| 21 | 7900 | 7,900 | ||||||
| 24 | 675 | 675 | ||||||
| 25 | 7,900 | -7900 | ||||||
| 26 | -2400 | -2400 | ||||||
| 28 | -800 | 850 | ||||||
| 29 | -4000 | 4000 | ||||||
| 30 | -150 | 150 | ||||||
| 30 | -890 | 890 | ||||||
| Balance | 130,060 | 675 | 2,400 | 0 | 130,000 | 4,000 | 16,925 | 9,790 |
Summary Introduction
Introduction: Cash Flow Analysis is a technique used by the company to know the overall worth of the company as well as its subsidiary or branches. Cash flow analysis helps in analyzing the company’s cash outflow and inflow through different activities like financing activities, investing activities, operating activities. This analysis shows how the company generates money or revenue for its working.
To prepare: Income statement and statement of retain earning.
Expert Solution
Answer to Problem 7PSB
Net income account for $7,135, retain earning account for $3,535 and assets and liabilities account for $133,135.
Explanation of Solution
Income statement for the month of May
| N companyIncome statement for the month ended May 31 | ||
| Particular | Amount $ | Amount $ |
| Revenues | 16925 | |
| Less: Expenses For Rent | 6000 | |
| Expenses for salaries | 1600 | |
| Expenses for telephone | 150 | |
| Expenses for utilities | 890 | |
| Expenses for advertisement | 1150 | |
| Net income | $7,135 | |
Statement of retain earning
| N companyIncome statement for the month ended May 31 | ||
| Particular | Amount $ | Amount $ |
| 0 | ||
| Add: Net income | 7135 | |
| Less: Dividend | 4000 | |
| Retained earnings as a June 30 | $3,135 | |
Balance sheet
| N companyBalance sheetFor the month ended may 31 | |||
| Assets | Liability | ||
| Particular | Amount | Particular | Amount |
| Cash | 130060 | Accounts payable | 0 |
| Office equipment | 2400 | Common stock | 130000 |
| Received account | 675 | Retained earning | 3135 |
| Total assets | 133135 | Total Liability | 133,135 |
Summary Introduction
Introduction: Cash Flow Analysis is a technique used by the company to know the overall worth of the company as well as its subsidiary or branches. Cash flow analysis helps in analyzing the company’s cash outflow and inflow through different activities like financing activities, investing activities, operating activities. This analysis shows how the company generates money or revenue for its working.
To construct: Cash flow statement for N company.
Expert Solution
Answer to Problem 7PSB
Balance of cash as on June 31st 130060
Explanation of Solution
Company’s cash flow statement
| N companyCash flow statement for June | ||
| Particular | ||
| Flow of cash from activities | 16250 | |
| Receipt of cash from customer | 6000 | |
| Payment if rent in cash | 1150 | |
| Payment made for cleaning | 150 | |
| Payment made for telephone expense | 890 | |
| Payment made for utilities | 1600 | |
| Net utilization of cash by activities operating | 6460 | |
| Flow of cash activities | ||
| Flow of cash from activities (investing) | ||
| Purchase of equipment | 2400 | |
| Net utilization of cash by activities (investing) | 2400 | |
| Flow of cash from activities (financing ) | ||
| Investment made by the owner | 130000 | |
| Dividend paid in cash | 4000 | |
| Net cash by activities | 126000 | |
| Net increment underlying | 130060 | |
| Balance of cash as on June 1 | 0 | |
| Balance of cash as on June 31st | 130060 | |
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Journal entry worksheet
1
2
3
Date
April 01
Issued a check in the amount of $4,800 to pay the monthly rent for the next 3
months.
Note: Enter debits before credits.
5
General Journal
Debit
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Chapter 1 Solutions
Loose Leaf for Financial Accounting: Information for Decisions
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