Oregon Co. began operations on January 1, Year 1, by issuing $10,000 in common stock to the stockholders. During the year, services in the amount of $32,000 were provided to customers on account, and 80% of this amount was collected by year-end. During the year, operating expenses incurred on account were $24,000, and 60% of this amount was paid by year-end. The company paid $1,000 of dividends to stockholders during the year. During the year, Oregon paid salaries of $3,000, and on December 31, Year 1, the company accrued salaries of $2,800.Oregon recorded all appropriate year-end adjustments.1) What would Oregon report for service revenue for Year 1?2) What would Oregon report for salaries expense for Year 1?3) What would the amount be for net cash flows from operating activities for
Year 1?4) What is the net income for Year 1?5) What would the balance in the retained earnings account be at December 31, Year 1?
What will be an ideal response?
1) $32,000
2) $5,800
3) $3,200
4) $2,200
5) $1,200
1) $32,000 Service Revenue (from services provided during the year)
2) $3,000 salaries expense paid + $2,800 accrued salaries at year end = $5,800 Sal. Exp.
3) $25,600 ($32,000 × .80) - $14,400 ($24,000 × .60) - $8,000 = $3,200 CF from OA
4) $32,000 revenue -$24,000 oper. exp. - $5,800 sal. exp.= $2,200 NI
5) $0 beg. + $2,200 NI - $1,000 Div. = $1,200 RE bal.
You might also like to view...
The carrying value of bonds is calculated by
a. subtracting the premium on bonds payable account balance from the bonds payable account balance. b. adding the premium on bonds payable account balance to the bonds payable account balance. c. adding the discount on bonds payable account balance to the bonds payable account balance. d. adding the bonds payable account balance to the bond interest payable account balance.
Total customer cost consists of only the non-monetary costs in evaluating, obtaining, using, and disposing of the given market offering
Indicate whether the statement is true or false
Laws would have no discernible meaning without the courts to interpret and apply them.
Answer the following statement true (T) or false (F)
The Designer Company issued 10-year bonds on January 1, 2009. The 6% bonds have a face value of $800,000 and pay interest every January 1 and July 1. The bonds were sold for $690,960 based on the market interest rate of 8%. Designer uses the effective-interest method to amortize bond discounts and premiums. On July 1, 2009, Designer should record interest expense (round to the nearest dollar) of
A) $27,638 B) $24,000 C) $48,000 D) $55,277