Question

Problem 1-35 Recording events in a horizontal statements model LO 1-3, 1-4, 1-5, 1-6, 1-7,1-8, 1-9, 1-10 The following information applies to the questions displayed below. Maben Company was started on January 1, 2018, and experienced the following events during its first year of operation: 1 Acquired $38,000 cash from the issue of common stock 2. Borrowed $32,000 cash from National Bank 3. Earned cash revenues of $56,000 for performing services 4. Paid cash expenses of $49,000 5. Paid a $1,800 cash dividend to the stockholders 6. Acquired an additional $28,000 cash from the issue of common stock 7. Paid $8,000 cash to reduce the principal balance of the bank note. 8. Paid $61,000 cash to purchase land. 9. Determined that the market value of the land is $85,000 Problem 1-35 Part f f. Determine the percentage of assets that were provided by investors, creditors, and earnings. (Round your answers to 2 decimal places.) Assets Investors Creditors Eamings

Answer 1

Considering the events given in the question, there are two assets available with the company i.e. cash and Land. To calculate cash balance, we need to prepare cash account.

Cash Account

Common stock	38,000	Expenses	49,000
Notes payable	32,000	Cash dividend	1,800
Service revenue	56,000	Note payable	8,000
Common stock	28,000	Land	61,000
		Balance c/d	34,200
	154,000		154,000

Hence, total assets = Cash + Land

= 34,200 + 61,000

= $95,200

Retained earnings = Service revenue - Cash expenses - Cash dividend

= 56,000 - 49,000 - 1,800

= $5,200

Assets of $95,200 were provided by investors, creditors and earnings as under:

Assets provided by investors i.e. common stockholders = $66,000

Hence, percentage of assets provided by investors = 66,000/95,200

= 69.33%

Assets provided by creditors i.e. notes payable = $24,000

Hence, percentage of assets provided by investors = 24,000/95,200

= 25.21%

Assets provided by earnings = $5,200

Hence, percentage of assets provided by earnings = 5,200/95,200

= 5.46%

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