Question;Problem 1- 30: Preparing financial statements for;two complete accounting cycles Webster Consulting experienced the following;transactions for 2012, its first year of operations, and 2013. Assume that all;transactions involve the receipt or payment of cash.;Transactions for 2012;1. Acquired $ 20,000 by issuing common stock.;2. Received $ 35,000 cash for providing services to;customers.;3. Borrowed $ 25,000 cash from creditors.;4. Paid expenses amounting to $ 22,000.;5. Purchased land for $ 30,000 cash. Transactions for;2013;Beginning account balances for 2013 are;Cash $ 28,000 Land;30,000 Notes payable 25,000 Common stock 20,000 Retained earnings 13,000;1. Acquired an;additional $ 24,000 from the issue of common stock.;2. Received $ 95,000;for providing services.;3. Paid $ 15,000 to;creditors to reduce loan.;4. Paid expenses;amounting to $ 71,500.;5. Paid a $ 3,000;dividend to the stockholders.;6. Determined that;the market value of the land is $ 47,000.;Required a. Write an;accounting equation, and record the effects of each accounting event under the;appropriate headings for each year. Record the amounts of revenue, expense, and;dividends in the Retained Earnings column. Provide appropriate titles for these;accounts in the last column of the table.;b. Prepare an income;statement, statement of changes in stockholders? equity, year- end bal-ance;sheet, and statement of cash fl ows for each year.;c. Determine the;amount of cash that is in the retained earnings account at the end of 2012 and;2013.;d. Examine the;balance sheets for the two years. How did assets change from 2012 to 2013?;e. Determine the;balance in the Retained Earnings account immediately after Event 2 in 2012 and;in 2013 are recorded.;Problem 2- 30 Events for two complete accounting;cycles Energy Consulting Company was formed on Junuary 1, 2012.;Events Affecting the;2012 Accounting Period;1. Acquired cash of;$ 80,000 from the issue of common stock.;2. Purchased $ 4,200;of suplies on account.;3. Purchased land;that cost $ 30,000 cash.;4. Paid $ 4,200 cash;to settle accounts payable created in Event 2.;5. Recognized;revenue on account of $ 75,000.;6. Paid $ 46,000;cash for other operating expenses.;7. Collected $;68,000 cash from accounts receivable. Information for 2012 Adjusting Entries;8. Recognized;accrued salaries of $ 5,800 on December 31, 2012.;9. Had $ 300 of;supplies on hand at the end of the accounting period.;Events Affecting the;2013 Accounting Period;1. Acquired an;additional $ 10,000 cash from the issue of common stock.;2. Paid $ 5,800 cash;to settle the salaries payable obligation.;3. Paid $ 6,000 cash;in advance for a lease on offi ce facilities.;4. Sold land that;had cost $ 25,000 for $ 25,000 cash.;5. Received $ 8,400;cash in advance for services to be performed in the future.;6. Purchased $ 1,800;of supplies on account during the year.;7. Provided services;on account of $ 90,000.;8. Collected $;92,000 cash from accounts receivable.;9. Paid a cash;dividend of $ 10,000 to the stockholders. Information for 2013 Adjusting;Entries;10. The advance;payment for rental of the office facilities (see Event 3) was made on;September 1 for a one- year lease term.;11. The cash advance;for services to be provided in the future was collected on June 1 (see Event;5). The one- year contract started June 1.;12. Had $ 350 of;supplies on hand at the end of the period.;13. Recognized;accrued salaries of $ 6,500 at the end of the accounting period.;Required;a. Identify each;event affecting the 2012 and 2013 accounting periods as asset source (AS);asset use (AU), asset exchange (AE), or claims exchange (CE). Record the;effects of each event under the appropriate general ledger account headings of;the accounting equation.;b. Prepare an income;statement, statement of changes in stockholders? equity, balance sheet, and;statement of cash flows for 2012 and 2013, using the vertical statements model.
Paper#49324 | Written in 18-Jul-2015Price : $27