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    Preparation of income statement, Balance sheet & cash flow

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    Chapter 2: Practice Exercise 2-14 - Expanded Accounting Equation
    For the following four cases, use the expanded accounting equation to compute the missing
    quantity.
    Assets Liabilities Capital Stock Retained Earnings
    Case A $23,000 $11,000 A $ 4,500
    Case B 17,500 B $ 4,500 3,600
    Case C C 14,000 11,000 27,000
    Case D 45,000 29,000 18,000 D

    Chapter 2: Exercise 2-25 - Balance Sheet Preparation
    From the following data, prepare a classified balance sheet for Taylorsville Construction
    Company at December 31, 2009.

    Income Statement Computations
    Following are the operating data for an advertising firm for the year ended December 31,
    2009.
    Accounts payable . . . . . . . . . . . . . . . . . . . . . . $ 74,300
    Accounts receivable . . . . . . . . . . . . . . . . . . . . . 113,500
    Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512,000
    Owners' equity, 1/1/09 . . . . . . . . . . . . . . . . . . 314,300
    Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,600
    Distributions to owners during 2009 . . . . . . . . 48,100
    Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,250
    Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000
    Mortgage payable . . . . . . . . . . . . . . . . . . . . . . 423,400
    Net income for 2009 . . . . . . . . . . . . . . . . . . . . 109,450
    Owners' equity, 12/31/09 . . . . . . . . . . . . . . . . ?

    Chapter 2: Exercise 2-27 (Part 1 only) - Income Statement Preparation
    The following selected information is taken from the records of Pickard and Associates.
    1. Prepare an income statement for the year ended December 31, 2009. (Assume that
    11,000 shares of stock are outstanding.)
    Accounts payable . . . . $143,000
    Accounts receivable . . . . . $95,000
    Advertising expense . . $14,500
    Cash . . . . . $63,000
    Supplies expense . . . . . . . . . . . . . . . . . . . . . . . . 31,500
    Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000
    Utilities expense . . . . . . . . . . . . . . . . . . . . . . . . . 2,500
    Income taxes (30% of
    income before taxes) ?
    Miscellaneous expense $5,100
    Owners' equity . . . . . . $215,000
    Salaries expense . . . . . . . . . . $78,000
    Fees (revenues) . . . . . . . . . . . . . . . . . . . . . . . . . $476,000

    Chapter 2: Exercise 2-29 - During 2009, Edgemont Corporation had revenues of $230,000 and expenses, including
    income taxes, of $190,000. On December 31, 2008, Edgemont had assets of $350,000,
    liabilities of $80,000, and capital stock of $210,000. Edgemont paid a cash dividend of
    $25,000 in 2009. No additional stock was issued. Compute the retained earnings on
    December 31, 2008, and 2009.

    Chapter 2: Exercise 2-32 - Cash Flow Computations
    From the following selected compute:
    1. Net cash flow provided (used) by operating activities.
    2. Net cash flow provided (used) by investing activities.
    3. Net cash flow provided (used) by financing activities.
    4. Net increase (decrease) in cash during the year.
    5. The cash balance at the end of the year.
    Cash receipts from:
    Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $270,000
    Investments by owners . . . . . . . . . . . . . . . . . . . . . . . 54,000
    Sale of building . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000
    Proceeds from bank loan . . . . . . . . . . . . . . . . . . . . . 60,000
    Cash payments for:
    Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 82,000
    Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000
    Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000
    Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,000
    Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,000
    Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
    Repayment of principal on loan . . . . . . . . . . . . . . . . . 40,000
    Purchase of land . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,000
    Cash balance at beginning of year . . . . . . . . . . . . . . . . $386,000
    Chapter 2: Exercise 2-33 -
    For each of the following items, indicate whether it would be classified and reported under
    the operating activities (OA), investing activities (IA), or financing activities (FA) section of a
    statement of cash flows:
    a. Cash receipts from selling merchandise
    b. Cash payments for wages and salaries

    Cash receipts from:
    Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $270,000
    Investments by owners . . . . . . . . . . . . . . . . . . . . . . . 54,000
    Sale of building . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000
    Proceeds from bank loan . . . . . . . . . . . . . . . . . . . . . 60,000
    Cash payments for:
    Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 82,000
    Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000
    Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000
    Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,000
    Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,000
    Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
    Repayment of principal on loan . . . . . . . . . . . . . . . . . 40,000
    Purchase of land . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,000
    Cash balance at beginning of year . . . . . . . . . . . . . . . . $386,000

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    https://brainmass.com/business/financial-statements/preparation-of-income-statement-balance-sheet-cash-flow-221025

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    Solution Summary

    The answer contains solutions for six problems namely computation of expanded accounting equation, preparation of balance sheet, income statement, computation of retained earnings,preparation of cash flow statement and identification of operating, investing and financing activities from the list of transactions.

    $2.19

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