During Year 1, Morsch Company issued common stock to stockholders for $10,000; purchased land for $2,000 cash; provided services to customers for $8,000; paid cash operating expenses of $6,200; and paid cash dividends of $1,000 to the company's owners. Required:Enter each of these events into the horizontal financial statements model, below. Indicate dollar amounts of increases and decreases. For cash flows, show whether they are operating activities (OA), investing activities (IA), or financing activities (FA). Enter a "0" if a transaction does not affect a given element of the accounting equation. EventAssets=Liab.+EquityRev.-Exp.=Net Inc.Stmt of Cash Flowsa)???????????b)???????????c)???????????
What will be an ideal response?
| Event | Assets | = | Liab. | + | Equity | Rev. | - | Exp. | = | Net Inc. | Stmt of Cash Flows |
| a) | 10,000 | ? | 0 | ? | 0 | 0 | ? | 0 | ? | 0 | 10,000 FA |
| b) | (2,000) | ? | 0 | ? | 0 | 0 | ? | 0 | ? | 0 | (2,000) IA |
| ? | 2,000 | ? | 0 | ? | 0 | 0 | ? | 0 | ? | 0 | 0 |
| c) | 8,000 | ? | 0 | ? | 8,000 | 8,000 | ? | 0 | ? | 8,000 | 8,000 OA |
| d) | (6,200) | ? | 0 | ? | 0 | 0 | ? | 6,200 | ? | 6,200 | (6,200) OA |
| e) | (1,000) | ? | 0 | ? | (1,000) | 0 | ? | 0 | ? | 0 | (1,000) FA |
You might also like to view...
Caterpillar's attention was focused elsewhere when Komatsu made its first international entry into the Eastern European Market. Based on the strategic intent framework, this is an example of:
A) changing the rules. B) collaborating. C) comparative advantage. D) layers of advantage. E) loose bricks.
Technical skill is the cognitive ability to see the selling process as a whole and the relationship among its parts.
Answer the following statement true (T) or false (F)
When a buying division elects to purchase from an outside supplier,
A) the impact on overall company profits is usually not considered in the decision. B) only fixed costs should be included in the decision analysis. C) the price from the outside supplier is likely to be more than the incremental cost to the supplying division. D) overall company profits should be enhanced.
Cottle Company has total assets of $220,000 and total liabilities of $70,000. The company's debt-to-equity ratio is closest to
A) .32 to 1 B) .68 to 1 C) .24 to 1 D) .47 to 1