a. The owner's initial investment consists of $36,570 cash and $46,080 in land in exchange for its common stock. b. The company's $16,450 equipment purchase is paid in cash. c. Cash paid to employees is $1,010. The accounts payable balance of $6,060 consists of the $1,770 office supplies purchase and $4,290 in employee salaries yet to be paid. d. The company's rent expense, telephone expense, and miscellaneous expenses are paid in cash. e. No cash has yet been collected on the $12,410 consulting revenue earned. Using the above information prepare a December statement of cash flows for Ernst Consulting. (Cash outflows should be indicated by a minus sign.) ERNST CONSULTING Statement of Cash Flows For Month Ended December 31 Cash flows from operating activities Cash received from customers Cash flows from investing activities Cash paid for office equipment Cash flows from financing activities Cash balance, December 1 Cash balance, December 31 $ 0 16,450 $ $ 0 16,450 0

a. The owner's initial investment consists of $36,570 cash and $46,080 in land in exchange for its common stock. b. The company's $16,450 equipment purchase is paid in cash. c. Cash paid to employees is $1,010. The accounts payable balance of $6,060 consists of the $1,770 office supplies purchase and $4,290 in employee salaries yet to be paid. d. The company's rent expense, telephone expense, and miscellaneous expenses are paid in cash. e. No cash has yet been collected on the $12,410 consulting revenue earned. Using the above information prepare a December statement of cash flows for Ernst Consulting. (Cash outflows should be indicated by a minus sign.) ERNST CONSULTING Statement of Cash Flows For Month Ended December 31 Cash flows from operating activities Cash received from customers Cash flows from investing activities Cash paid for office equipment Cash flows from financing activities Cash balance, December 1 Cash balance, December 31 $ 0 16,450 $ $ 0 16,450 0

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter1: Introduction To Accounting And Business

Section: Chapter Questions

Problem 3BE: Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected...

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Analyzing Transactions. Using the analytical framework, indicate the effect of the following related transactions of a firm. a. January 1: Issued 10,000 shares of common stock for 50,000. b. January 1: Acquired a building costing 35,000, paying 5,000 in cash and borrowing the remainder from a bank. c. During the year: Acquired inventory costing 40,000 on account from various suppliers. d. During the year: Sold inventory costing 30,000 for 65,000 on account. e. During the year: Paid employees 15,000 as compensation for services rendered during the year. f. During the year: Collected 45,000 from customers related to sales on account. g. During the year: Paid merchandise suppliers 28,000 related to purchases on account. h. December 31: Recognized depreciation on the building of 7,000 for financial reporting. Depreciation expense for income tax purposes was 10,000. i. December 31: Recognized compensation for services rendered during the last week in December but not paid by year-end of 4,000. j. December 31: Recognized and paid interest on the bank loan in Part b of 2,400 for the year. k. Recognized income taxes on the net effect of the preceding transactions at an income tax rate of 40%. Assume that the firm pays cash immediately for any taxes currently due to the government.
Provide journal entries to record each of the following transactions. For each, identify whether the transaction represents a source of cash (S), a use of cash (U), or neither (N). A. Paid $22,000 cash on bonds payable. B. Collected $12,600 cash for a note receivable. C. Declared a dividend to shareholders for $16,000, to be paid in the future. D. Paid $26,500 to suppliers for purchases on account. E. Purchased treasury stock for $18,000 cash.
Transactions Interstate Delivery Service is owned and operated by Katie Wyer. The following selected transactions were completed by Interstate Delivery during May: 1. Received cash in exchange for common stock, 18,000. 2. Paid advertising expense, 4,850. 3. Purchased supplies on account, 2,100. 4. Billed customers for delivery services on account, 14,700. 5. Received cash from customers on account, 8,200. Indicate the effect of each transaction on the following accounting equation elements: Assets, Liabilities, Common Stock, Dividends, Revenue, and Expense. To illustrate, the answer to (1) follows: (1) Asset (Cash) increases by 18,000; Common Stock increases by 18,000.
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Provide journal entries to record each of the following transactions. For each, also identify *the appropriate section of the statement of cash flows, and s utility bill, $1,500
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Prepare general journal entries for the following transactions, identifying each transaction by letter: (a) Gnu Company issued 5,000 shares of 1 par common stock to the Prendergas law firm as partial payment of fees incurred to incorporate the business. Gnu was short of cash, so Prendergas agreed to accept 10,000 cash and the shares of common stock in full settlement of its bill for 55,000. (b) Gnu issued 50,000 shares of 1 par common stock in exchange for a parcel of land for building a shopping plaza. (The list price for the land was 400,000; a similar parcel in the same area sold last week for 380,000. During the past month, the price at which Gnus common stock has traded on the open market has ranged from 5 to 12 per share. Two trades occurred yesterday at 7 and 10 per share.) (c) Gnu purchased 10,000 shares of 1 par value common treasury stock for 70,000. (This is the only treasury stock that Gnu holds.) (d) Gnu sold 4,000 shares of common treasury stock for 32,000. (e) Gnu sold 5,000 shares of common treasury stock for 30,000.