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Chapter 1: Q12QS (page 32)

Indicate in which financial statement(s) each item would most likely appear: income statement (I), balance sheet (B), statement of retained earnings (E), or statement of cash flows (CF). a. Assets b. Cash from operating activities c. Dividends d. Equipment e. Expenses f. Liabilities g. Net decrease (or increase) in cash h. Revenues i. Total liabilities and equity.

Short Answer

Expert verified

Balance sheet of the company is a financial statement that reports assets, liabilities, and stockholders’ equity.

Step by step solution

01

Step-by-Step SolutionStep 1: Definition of Balance Sheet

Balance sheet refers to the financial statement of a company which shows its financial health by reporting assets, liabilities, and equity.

02

Indication of financial statement

Items

Financial Statements

A Assets

Balance Sheet

B Cash from operating activities

Cash flow statement

C Dividends

Cash flow statement

D Equipment

Balance Sheet

E Expenses

Income Statement

F Liabilities

Balance Sheet

G Net decrease (on increase) in cash

Cash flow statement

H Revenues

Income Statement

I Total liabilities and equity

Balance Sheet

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Most popular questions from this chapter

Sanyu Sony started a new business and completed these transactions during December.

Dec. 1 Sanyu Sony transferred \(65000 cash from a personal savings account to a checking account in the name of Sony Electric in exchange for its common stock.

2 The company rented office space and paid \)1000 cash for the December rent.

3 The company purchased \(13000 of electrical equipment by paying \)4800 cash and agreeing to pay the \(8200 balance in 30 days.

5 The company purchased office supplies by paying \)800 cash.

6 The company completed electrical work and immediately collected \(1200 cash for these services.

8 The company purchased \)2530 of office equipment on credit.

15 The company completed electrical work on credit in the amount of \(5000.

18 The company purchased \)350 of office supplies on credit.

20 The company paid \(2530 cash for the office equipment purchased on December 8.

24 The company billed a client \)900 for electrical work completed; the balance is due in 30 days.

28 The company received \(5000 cash for the work completed on December 15.

29 The company paid the assistant’s salary of \)1400 cash for this month.

30 The company paid \(540 cash for this month’s utility bill.

31 The company paid \)950 cash in dividends to the owner (sole shareholder).

Required 3. Prepare the statement of cash flows for the current month.

The following financial statement information is from five separate companies.

Company Company Company Company Company

V W X Y Z

December 31, 2016

Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . \(54,000 \) 80,000 \(141,500 \)92,500 $144,000

Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 60,000 68,500 51,500 ?

December 31, 2017

Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,000 100,000 186,500 ? 170,000

Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 36,000 ? 65,800 42,000 42,000

During year 2017

Stock issuances . . . . . . . . . . . . . . . . . . . 5,000 20,000 ? 48,100 60,000

Net income (or loss) . . . . . . . . . . . . . . . . ? 40,000 18,500 24,000 32,000

Cash dividends . . . . . . . . . . . . . . . . . . . 5,500 2,000 0 20,000 8,000

Required 2. Answer the following questions about Company W.

a. What is the amount of equity on December 31, 2016?

b. What is the amount of equity on December 31, 2017?

c. What is the amount of liabilities on December 31, 2017?

A start-up company often engages in the following transactions during its first year of operations. Classify those transactions in one of the three major categories of an organization’s business activities. F. Financing I. Investing O. Operating

1. Shareholders investing land in business.

2. Purchasing a building.

3. Purchasing land.

4. Borrowing cash from a bank.

5. Purchasing equipment.

6. Selling and distributing products.

7. Paying for advertising.

8. Paying employee wages.

Rivera Roofing Company, owned by Reyna Rivera, began operations in July and completed these transactions during that first month of operations.

July 1 Reyna Rivera invested \(80,000 cash in the company in exchange for its common stock.

2 The company rented office space and paid \)700 cash for the July rent.

3 The company purchased roofing equipment for \(5,000 by paying \)1,000 cash and agreeing to pay the \(4,000 balance in 30 days.

6 The company purchased office supplies for \)600 cash.

8 The company completed work for a customer and immediately collected \(7,600 cash for the work.

10 The company purchased \)2,300 of office equipment on credit.

15 The company completed work for a customer on credit in the amount of \(8,200.

17 The company purchased \)3,100 of office supplies on credit.

23 The company paid \(2,300 cash for the office equipment purchased on July 10.

25 The company billed a customer \)5,000 for work completed; the balance is due in 30 days.

28 The company received \(8,200 cash for the work completed on July 15.

30 The company paid an assistant’s salary of \)1,560 cash for this month.

31 The company paid \(295 cash for this month’s utility bill.

31 The company paid \)1,800 cash in dividends to the owner (sole shareholder).

Required 1. Create the following table similar to the one in Exhibit 1.9.

Use additions and subtractions within the table to show the dollar effects of each transaction on individual items of the accounting equation. Show new balances after each transaction.

Question: Accounting is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization’s business activities. Classify the following activities as part of the identifying (I), recording (R), or communicating (C) aspects of accounting. 1. Analyzing and interpreting reports. 2. Presenting financial information. 3. Keeping a log of service costs. 4. Measuring the costs of a product. 5. Preparing financial statements. 6. Seeing revenues generated from a service. 7. Observing employee tasks behind a product. 8. Registering cash sales of products sold.
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