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E3-1 Transactions using accrual accounting Terry Mason organized The Fifth Season at the beginning of February 20Y4. During F


Obj. 2 E3-1 Transactions using accrual accounting Terry Mason organized The Fifth Season at the beginning of February 20Y4. D
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Answer #1

Statement of Cash Flows

Balance Sheet

Assets

=

Liabilities

+

Stockholders' Equity

Cash

+

Supplies

+

Prepaid Insurance

=

Accounts Payable

+

Common Stock

+

Retained Earnings

a. Investment

 $15,000 + + = + $15,000 +

b. Paid insurance

 ($2,700) + + $2,700 = + +

    Balances

 $12,300 + $0 + $2,700 = $0 + $15,000 + $0

c. Purchased supplies

 + $900 + = $900 + +

    Balances

 $12,300 + $900 + $2,700 = $900 + $15,000 + $0

d. Fees earned

 $28,500 + + = + + $28,500

    Balances

 $40,800 + $900 + $2,700 = $900 + $15,000 + $28,500

e. Paid expenses

–$17,000

 + + = + +

–$17,000

    Balances

$23,800

 +

$900

 +

$2,700

 =

$900

 +

$15,000

 +

11,500

f. Paid dividends

-$4,000

 + + = + +

-$4,000

    Balances

$19,800

 +

$900

 +

$2,700

 =

$900

 +

$15,000

 +

$7,500

a1.  

 + + -$225 = + + -$225

    Balances

 $19,800 + $900 + $2,475 = $900 + $15,000 + $7,275

a2.  

 + -$750 + = + + -$750

    Balances, February 28

 $19,800 + $150 + $2,475 = $900 + $15,000 + $6,525

Statement of Cash Flows

Income Statement

a. Financing

 $15,000 Investment

  d. Fees earned

 $28,500

b. Operating

 -$2,700 paid insurance

  e. Wages expense

 -$10,800

d. Operating

 $28,500 Fees earned

  e. Rent expense

 -$3,200

e. Operating

 -$17,000 Paid expenses

  e. Utilities expense

 -$1,400

f. Financing

 -$4,000 Paid dividends

  e. Miscellaneous expense

 -$1,600

   Increase in cash

 $19,800

a1.  

-$225

a2.  

-$750

Net income

$10,525
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