Question

Required information Exercise 2-3A Effect of accruals on the financial statements LO 2-1, 2-2, 2-3 (The following information applies to the questions displayed below.) Milea Inc. experienced the following events in Year 1, its first year of operations: 1. Received $16,000 cash from the issue of common stock. 2. Performed services on account for $45,000. 3. Paid the utility expense of $1,050. 4. Collected $37,830 of the accounts receivable. 5. Recorded $7,750 of accrued salaries at the end of the year. 6. Paid a $1,200 cash dividend to the stockholders. Exercise 2-3A Part b b-1. Prepare the income statement MILEA, INC. Income Statement For the Year Ended December 31, Year 1 $ 45,000 Revenue Expenses Utility expense Salaries expense $ 1,050 Total expenses (1,050) $ 43,950 < Prev 2 of 8 Next >

Answer 1

Answer to given Question :

MILEA INC
Income Statement
For the Year Ended December 31, Year 1
Particulars	Amount($)	Amount($)
Revenue		45,000.00
Expenses
Utility expenses	(1,050.00)
Salaries Expenses	(7,750.00)
Total Expenses		(8,800.00)
Net Income		36,200.00

MILEA INC
Statement of Changes in Stockholde'r Equity
For the Year Ended December 31, Year 1
Particulars	Amount($)	Amount($)
Beginning Commin Stocks	-
Add: Issue of Common Stock	16,000.00
Ending Common Stock		16,000.00
Beginning Retained Earning	-
Addition during the Year 1	35,000.00
Ending Retained Earning		35,000.00
Total Stockholder's Equity		51,000.00

MILEA INC
Balance Sheet
As of December 31, Year 1
Particulars	Amount($)	Amount($)
Assets	-
Accounts Receivable	7,170.00
Cash	51,580.00
Total Assets		58,750.00
Liabilities	-
Accrues Salaries	7,750.00
Total Liabilities		7,750.00
Stackholder's Equity
Common Stcok	16,000.00
Retained Earning	35,000.00
Total Stackholder's Equity		51,000.00
Total Liabilities & Stackholder's Equity		58,750.00

MILEA INC
Statement of Cash Flows
As of December 31, Year 1
Particulars	Amount($)	Amount($)
Cash Flows From Operating Activities
Net Income (Operating Profit)	36,200.00
Change in Account Receivables
(Opeing Bal -Closing bal.) = ($ 0 - $ 7,170)	(7,170.00)
Change in Accrued Salaries
(Closing bal. - Opeing Bal ) = ($ 7,750 - $ 0)	7,750.00
Net Cash Flows from Operating Activities		36,780.00
Cash Flows From Investing Activities		-
Cash Flows From Financing Activities
Issue of Common Stock	16,000.00
cash Dividend Paid	(1,200.00)
Net Cash Flows From Financing Activities		14,800.00
Cash & Cash Equivalent at the opening of Year 1		-
Cash & Cash Equivalent during the Year 1		51,580.00
Cash & Cash Equivalent at the Closing of Year 1		51,580.00