Assume that you are the president of Highlight Construction Company. At the end of the first year of operations (December 31), the following financial data for the company are available: Cash Receivables from customers (all considered collectible) Inventory of merchandise (based on physical count and priced at cost) Equipment owned, at cost less used portion Accounts payable owed to suppliers Salary payable (on December 31, this was owed to an employee who will be paid on January 10) Total sales revenue Expenses, including the cost of the merchandise sold (excluding income taxes) Income tax expense at 30% x pretax income; all paid during the current year Common stock (December 31) P1-1 Part 3 3. Prepare a balance sheet at December 31. Dividends declared and paid during the current year (Note: The beginning balances in Common stock and Retained earnings are zero because it is the first year of operations.) Assets Cash Receivables from customers Inventory of merchandise Equipment Total assets Liabilities Accounts payable Salary payable HIGHLIGHT CONSTRUCTION COMPANY Balance Sheet At December 31, Current Year Total liabilities $ $ 25,600 11,300 76,000 41,000 46,740 3,000 0 120,000 85,200 ? 90,600 10,800

Assume that you are the president of Highlight Construction Company. At the end of the first year of operations (December 31), the following financial data for the company are available: Cash Receivables from customers (all considered collectible) Inventory of merchandise (based on physical count and priced at cost) Equipment owned, at cost less used portion Accounts payable owed to suppliers Salary payable (on December 31, this was owed to an employee who will be paid on January 10) Total sales revenue Expenses, including the cost of the merchandise sold (excluding income taxes) Income tax expense at 30% x pretax income; all paid during the current year Common stock (December 31) P1-1 Part 3 3. Prepare a balance sheet at December 31. Dividends declared and paid during the current year (Note: The beginning balances in Common stock and Retained earnings are zero because it is the first year of operations.) Assets Cash Receivables from customers Inventory of merchandise Equipment Total assets Liabilities Accounts payable Salary payable HIGHLIGHT CONSTRUCTION COMPANY Balance Sheet At December 31, Current Year Total liabilities $ $ 25,600 11,300 76,000 41,000 46,740 3,000 0 120,000 85,200 ? 90,600 10,800

Name: Assume that you are the president of Highlight Construction Company.
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Description: Assume that you are the president of Highlight Construction Company. At the end of the first year of operations(December 31), the following financial data for the company are available:CashReceivables from customers (all considered collectible)Inven

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 38E: Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on...

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Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on transactions that occurred during the year: a. Purchased supplies on credit, $18,600 b. Paid $14,800 cash toward the purchase in Transaction a c. Provided services to customers on credit1 $46,925 d. Collected $39,650 cash from accounts receivable e. Recorded depreciation expense, $8,175 f. Employee salaries accrued, $15,650 g. Paid $15,650 cash to employees for salaries earned h. Accrued interest expense on long-term debt, $1,950 i. Paid a total of $25,000 on long-term debt, which includes $1.950 interest from Transaction h j. Paid $2,220 cash for l years insurance coverage in advance k. Recognized insurance expense, $1,340, that was paid in a previous period l. Sold equipment with a book value of $7,500 for $7,500 cash m. Declared cash dividend, $12,000 n. Paid cash dividend declared in Transaction m o. Purchased new equipment for $28,300 cash. p. Issued common stock for $60,000 cash q. Used $10,700 of supplies to produce revenues Summit Sales uses the indirect method to prepare its statement of cash flows. Required: 1. Construct a table similar to the one shown at the top of the next page. Analyze each transaction and indicate its effect on the fundamental accounting equation. If the transaction increases a financial statement element, write the amount of the increase preceded by a plus sign (+) in the appropriate column. If the transaction decreases a financial statement element, write the amount of the decrease preceded by a minus sign (-) in the appropriate column. 2. Indicate whether each transaction results in a cash inflow or a cash outflow in the Effect on Cash Flows column. If the transaction has no effect on cash flow, then indicate this by placing none in the Effect on Cash Flows column. 3. For each transaction that affected cash flows, indicate whether the cash flow would be classified as a cash flow from operating activities, cash flow from investing activities, or cash flow from financing activities. If there is no effect on cash flows, indicate this as a non-cash activity.
Required information [The following information applies to the questions displayed below.] Assume that you are the president of Highlight Construction Company. At the end of the first year of operations (December 31), the following financial data for the company are available: Cash Receivables from customers (all considered collectible) Inventory of merchandise (based on physical count and priced at cost) Equipment owned, at cost less used portion Accounts payable owed to suppliers Salary payable (on December 31, this was owed to an employee who will be paid on January 10) Total sales revenue Expenses, including the cost of the merchandise sold (excluding income taxes) Income tax expense at 30% x pretax income; all paid during the current year Common stock (December 31) Dividends declared and paid during the current year (Note: The beginning balances in Common stock and Retained earnings are zero because it is the first year of operations.) $ 25,600 10,800 81,000 42,000 46,140 2,520…
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Holmes Cleaning Service began operation on January 1, Year 1. The company experienced the following events for its first year of operations. Events Affecting Year Provided $180,000 of cleaning services on accoun Collected $135,000 cash from accounts receivabl Paid salaries of $38,000 for the yea Adjusted the accounts to reflect management’s expectations that uncollectible accounts expense would be $1,200. The expense was determined using the percent of revenue metho A. Post the general journal entries to T-account B. Prepare an income statement, balance sheet, and statement of cash flows for Year 1.
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