Explore BrainMass

Explore BrainMass

    Prepare an income statement, statement of changes

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Prepare an income statement, statement of changes in stockholders' equity, year-end balance sheet, and statement of cash flows for the 2004 accounting period.

    Real World, Inc., experienced the following events during 2004.
    1. Acquired $55,000 cash from the issue of common stock.
    2. Paid $15,000 cash to purchase land.
    3. Borrowed $5,000 cash from First Bank.
    4. Provided services for $21,000 cash.
    5. Paid $1,500 cash for utilities expense.
    6. Paid $11,000 cash for other operating expenses.
    7. Paid a $2,000 cash dividend to the stockholders.
    8. Determined that the market value of the land purchased in Event 2 is $20,000.

    Required
    a. The January 1, 2004, general ledger account balances are shown in the following accounting equation.
    Record the eight events in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table.

    J & A, INC.
    A Real World, Inc.

    Event Assets = Liabilities + Stockholder's Account
    Equity Titles for R/E

    Balance Cash Land Notes Common Retained
    Payable Stock Earnings
    1/1/2004 12,000 20,000 0 15,000 17,000
    Accounting Equation
    Acct. Titles
    Event Assets _ Liabilities _ Stockholders' Equity for RE
    Notes Common Retained
    Cash Land Payable Stock Earnings

    b. Prepare an income statement, statement of changes in stockholders' equity, year-end balance sheet, and statement of cash flows for the 2004 accounting period.
    Please Show All Work.

    © BrainMass Inc. brainmass.com June 3, 2020, 9:41 pm ad1c9bdddf
    https://brainmass.com/business/financial-statements/prepare-an-income-statement-statement-of-changes-195168
    $2.19

    ADVERTISEMENT