OB The assets and liabilities of Global Travel Agency on December 31, 20Y5, and its revenue a expenses for the year are as follows: FIEI $ 108,000 539,000 200,000 575,000 940,000 1,500,000 Accounts payable Miscellaneous expense $ 19,500 Rent expense Accounts receivable 56,000 Cash Supplies Supplies expense Utilities expense 6,000 Common stock 12,700 Fees earned 34,800 Land Wages expense 415,000 Common stock was $525,000 and retained earnings was $1,250,000 as of January 1, 20Y5. Durir the additional common stock of $50,000 was issued for cash, and dividends of $90,0C year, were paid. Instructions 1. Prepare an income statement for the year ended December 31, 20Y5. 2. Prepare a statement of stockholders' equity for the year ended December 31, 20Y5. 3. Prepare a balance sheet as of December 31, 20Y5

OB The assets and liabilities of Global Travel Agency on December 31, 20Y5, and its revenue a expenses for the year are as follows: FIEI $ 108,000 539,000 200,000 575,000 940,000 1,500,000 Accounts payable Miscellaneous expense $ 19,500 Rent expense Accounts receivable 56,000 Cash Supplies Supplies expense Utilities expense 6,000 Common stock 12,700 Fees earned 34,800 Land Wages expense 415,000 Common stock was $525,000 and retained earnings was $1,250,000 as of January 1, 20Y5. Durir the additional common stock of $50,000 was issued for cash, and dividends of $90,0C year, were paid. Instructions 1. Prepare an income statement for the year ended December 31, 20Y5. 2. Prepare a statement of stockholders' equity for the year ended December 31, 20Y5. 3. Prepare a balance sheet as of December 31, 20Y5

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter1: Accounting And The Financial Statements

Section: Chapter Questions

Problem 27BE: Retained Earnings Statement Listed below are events that affect stockholders equity. Reported net...

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Balance sheet Using the following data for Paradise Travel Service as well as the statement of stockholders equity from Basic Exercise 1-5, prepare a Balance sheet as of May 31. 20Y6: Accounts payable 18,000 Accounts receivable 38,000 Cash 52,000 Common stock 100,000 Land 450,000 Supplies 3,000
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Ethics in Action Lucas Hunter, president of Simmons Industries Inc., believes that reporting operating cash flow per share on the income statement would be a useful addition to the companys just completed financial statements. The following discussion took place between Lucas Hunter and Simmons' controller, John Jameson, in January, after the close of the fiscal year: Lucas: Ive been reviewing our financial statements for the last year. I am disappointed that our net income per share has dropped by 10% from last year. This won't look good to our shareholders. Is there anything we can do about this? John. What do you means? The past is the past, and the numbers are in. There isnt much that can be done about it Our financial statements were prepared according to generally accepted accounting principles, and I dont see much leeway for significant change at this point. Lucan No, no. Ive not suggesting that we cook the books. But look at the cash flow from operating activities on the statement of cash flows. The cash flow from operating activities has increased by 20%. This is very good newsand. I might add, useful information. The higher cash flow from operating activities will give our creditors comfort. John. Well, the cash flow from operating activities is on the statement of cash flows, so I guess users will be able to see the improved cash flow figures there Lucas: This is true, but somehow I think this information should be given a much higher profile. I don't like this information being buried in the statement of cash flows. You know as well as I do that many users will focus on the income statement Therefore. I think we ought to include an operating cash flow per share number on the face of the income statementsomeplace under the earnings per share number In this way, users will get the complete picture of our operating performance. Yes, our earnings per share dropped this year, but our cash flow from operating activities improved! And all the information is in one place where users can see and compare the figures. What do you think? John I've never really thought about it like that before I guess we could put the operating cash flow per share on the income statement, underneath the earnings per share amount. Users would really benefit from this disclosure. Thanks for the ideaI'll start working on it. Lucas: Glad to be of service. How would you interpret this situation? Is John behaving in an ethical and professional manner?
Net income and dividends The income statement for the month of February indicates a net income of 17,500. During the same period, 25,500 in cash dividends were paid. Would it be correct to say that the business incurred a net loss of 8,000 during the month? Discuss.
Retained Earnings Statement Listed below are events that affect stockholders equity. Reported net income of $85,000. Paid a cash dividend of $10,000. Reported sales revenue of $120,000. Issued common stock of $50,000 Reported a net loss of $20,000. Reported of S35,000. Required: For each of the events, indicate whether it increases retained earnings (I), decreases retained earnings (D), or has no effect on retained earnings (NE).
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