Use Redlands’ 2020 balance sheet from Exhibit 2-1 in your Bergevin and MacQueen textbook as the starting point for this problem. Assume that Redlands had the following transactions in 2021: Borrowed $80 in cash from a bank at the beginning of 2021. Received $50 cash from the 2020 consulting engagement. Paid $30 cash for the 2020 operating expenses. Earned $60 in consulting revenue for 2021—collected one-half of the revenue in cash. Incurred $35 of operating expenses in 2021—paid $20 of the operating expenses in cash. Recorded 2021 depreciation expense of $15 on the equipment purchased in 2020. Paid $8 of interest for the $80 cash borrowed at the beginning of 2021. complete the tables for 2021:
Use Redlands’ 2020 balance sheet from Exhibit 2-1 in your Bergevin and MacQueen textbook as the starting point for this problem. Assume that Redlands had the following transactions in 2021: Borrowed $80 in cash from a bank at the beginning of 2021. Received $50 cash from the 2020 consulting engagement. Paid $30 cash for the 2020 operating expenses. Earned $60 in consulting revenue for 2021—collected one-half of the revenue in cash. Incurred $35 of operating expenses in 2021—paid $20 of the operating expenses in cash. Recorded 2021 depreciation expense of $15 on the equipment purchased in 2020. Paid $8 of interest for the $80 cash borrowed at the beginning of 2021. complete the tables for 2021:
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter3: Review Of A Company's Accounting System
Section: Chapter Questions
Problem 15E: (Appendix 3.1) Cash-Basis Accounting Puntarelli Contracting keep its accounting records on a cash...
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2.2 Use Redlands’ 2020 balance sheet from Exhibit 2-1 in your Bergevin and MacQueen textbook as the starting point for this problem. Assume that Redlands had the following transactions in 2021:
- Borrowed $80 in cash from a bank at the beginning of 2021.
- Received $50 cash from the 2020 consulting engagement.
- Paid $30 cash for the 2020 operating expenses.
- Earned $60 in consulting revenue for 2021—collected one-half of the revenue in cash.
- Incurred $35 of operating expenses in 2021—paid $20 of the operating expenses in cash.
- Recorded 2021
depreciation expense of $15 on the equipment purchased in 2020. - Paid $8 of interest for the $80 cash borrowed at the beginning of 2021.
complete the tables for 2021:
- Record the transactions in the general journal.
Post the entries to the ledger (Note that the 2021 beginning balances in each account have already been entered for you, where appropriate).- Construct a
trial balance . - Present the financial statements in good form.
- Close the temporary accounts.
General Journal Trans. Accounts Debit Credit 1 Cash 80 Note payable 80 2 Cash 50 Accounts Receivable 50 3 Accounts Payable 30 Cash 30 4 Cash 30 Accounts receivable 30 Sales revenue 60 5 Operating expenses 35 Cash 20 Accounts payable 15 6 Depreciation 15 Accumulated Depreciation 15 7 Intrest expense 8 Cash 8 General Journal - Closing Entries Date Accounts Debit Credit 8 9 Ledgers Assets Account Trans. Debit Credit Balance Cash 4 30 $30 db. 1 80 $80 db. 2 50 $50 db. 3 30 $30 db. 5 20 $20 db. 7 8 $8 db. Account Trans. Debit Credit Balance Accounts receivable 2 50 $50 db. 4 30 $30db. Account Trans. Debit Credit Balance Equipment 4 60 $60 db. Account Trans. Debit Credit Balance Accum depreciation 6 15 $15 cr. Liabilities Account Trans. Debit Credit Balance Accounts payable 3 30 $ 30 cr. 5 15 $15 cr. Account Trans. Debit Credit Balance Note payable 1 80 $80 cr. Shareholders’ Equity Account Trans. Debit Credit Balance Common stock $90 cr. Account Trans. Debit Credit Balance Retained earnings $5 cr. Revenues Account Trans. Debit Credit Balance Consulting revenues Expenses Account Trans. Debit Credit Balance Operating expense Account Trans. Debit Credit Balance Depreciation exp. Account Trans. Debit Credit Balance Interest exp. Trial Balance 12/31/2021 Accounts Debit Credit Cash Accounts receivable Equipment Accumulated depreciation Accounts payable Note payable Common stock Retained earnings (before close) Sales revenues Depreciation expense Operating expenses Interest expense Total Financial Statements Redlands, Inc. Income Statement For the Year Ended December 31, 2021 Sales revenue Operating expenses Depreciation expense Interest expense Net income Redlands, Inc. Statement of Shareholders’ Equity For the Year Ended December 31, 2021 Beginning contributed capital Capital contributed in 2018 Ending contributed capital Beginning retained earnings Net income in 2018 Ending retained earnings Total shareholders' equity Redlands, Inc. Balance Sheet 12/31/2021 Assets Cash Accounts receivable Equipment Less: accumulated depreciation Total Assets Liabilities Accounts payable Note payable Total Liabilities Shareholders' Equity (S/E) Common stock Retained earnings Total Shareholders' Equity Total Liabilities and S/E Redlands, Inc. Statement of Cash Flows For the Year Ended December 31, 2021 Cash flows from operating activities: Net Income Depreciation expense, equipment Change in accounts receivable Change in accounts payable Net cash provided by operating activities Cash flows from investing activities: Purchase of equipment Net cash used for investment activities Cash flows from financing activities: Issue note payable Net cash provided by financing activities Net change in cash Cash, beginning of the year Net change in cash Cash, end of the year
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