As of January 1, Year 2, Room Designs, Incorporated had a balance of $5,200 in Cash, $2,850 in Common Stock, and $2,350 in Retained Earnings. These were the only accounts with balances in the ledger on January 1, Year 2. Further analysis of the company's cash account indicated that during the Year 2 accounting period, the company had (1) net cash inflow from operating activities of $5,450, (2) net cash outflow for investing activities of $13,700, and (3) net cash inflow from financing activities of $13,900. All revenue and expense events were cash events. The following accounts and balances represent the financial condition of Room Designs, Incorporated as of December 31, Year 2, before closing. Assets Cash Balance 10,850 Land Balance 13,700 ROOM DESIGNS INCORPORATED General Ledger + Liabilities Notes Payable Balance 6,500 Stockholders' Equity Common Stock Balance 11,850 Retained Earnings Balance 2,350 Revenue Balance 10,600 Expenses Balance 5,150 Dividends Balance 1,600 Required a. Assume that the net cash inflow from financing activities of $13,900 was caused by three events. Based on the given information, identify these events and determine the cash flow associated with each event. b. What did the company purchase that resulted in the cash outflow from investing activities? c-1. Prepare an income statement for the year ended December 31, Year 2.

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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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As of January 1, Year 2, Room Designs, Incorporated had a balance of $5,200 in Cash, $2,850 in Common Stock, and $2,350 in
Retained Earnings. These were the only accounts with balances in the ledger on January 1, Year 2. Further analysis of the company's
cash account indicated that during the Year 2 accounting period, the company had (1) net cash inflow from operating activities of
$5,450, (2) net cash outflow for investing activities of $13,700, and (3) net cash inflow from financing activities of $13,900. All revenue
and expense events were cash events. The following accounts and balances represent the financial condition of Room Designs,
Incorporated as of December 31, Year 2, before closing.
Assets
Cash
Balance 10, 850
Land
Balance 13,700
ROOM DESIGNS INCORPORATED
General
Ledger
Req A
Liabilities
Notes Payable
Balance 6,500
Req B
Required
a. Assume that the net cash inflow from financing activities of $13,900 was caused by three events. Based on the given information,
identify these events and determine the cash flow associated with each event.
b. What did the company purchase that resulted in the cash outflow from investing activities?
c-1. Prepare an income statement for the year ended December 31, Year 2.
c-2. Prepare a statement of changes in stockholders' equity for the year ended December 31, Year 2.
c-3. Prepare a balance sheet as of December 31, Year 2.
c-4. Prepare a statement of cash flows for the year ended December 31, Year 2.
Complete this question by entering your answers in the tabs below.
Req C1
Stockholders' Equity
Common Stock
Balance 11,850
Retained Earnings
Balance 2,350
Req C2
Req C3
Revenue
Balance 10,600
Expenses
Balance 5,150
Dividends
Balance 1,600
Req C4
Transcribed Image Text:As of January 1, Year 2, Room Designs, Incorporated had a balance of $5,200 in Cash, $2,850 in Common Stock, and $2,350 in Retained Earnings. These were the only accounts with balances in the ledger on January 1, Year 2. Further analysis of the company's cash account indicated that during the Year 2 accounting period, the company had (1) net cash inflow from operating activities of $5,450, (2) net cash outflow for investing activities of $13,700, and (3) net cash inflow from financing activities of $13,900. All revenue and expense events were cash events. The following accounts and balances represent the financial condition of Room Designs, Incorporated as of December 31, Year 2, before closing. Assets Cash Balance 10, 850 Land Balance 13,700 ROOM DESIGNS INCORPORATED General Ledger Req A Liabilities Notes Payable Balance 6,500 Req B Required a. Assume that the net cash inflow from financing activities of $13,900 was caused by three events. Based on the given information, identify these events and determine the cash flow associated with each event. b. What did the company purchase that resulted in the cash outflow from investing activities? c-1. Prepare an income statement for the year ended December 31, Year 2. c-2. Prepare a statement of changes in stockholders' equity for the year ended December 31, Year 2. c-3. Prepare a balance sheet as of December 31, Year 2. c-4. Prepare a statement of cash flows for the year ended December 31, Year 2. Complete this question by entering your answers in the tabs below. Req C1 Stockholders' Equity Common Stock Balance 11,850 Retained Earnings Balance 2,350 Req C2 Req C3 Revenue Balance 10,600 Expenses Balance 5,150 Dividends Balance 1,600 Req C4
Complete this question by entering your answers in the tabs below.
Req A
Assets
Req B
Total assets
Liabilities
Prepare a balance sheet as of December 31, Year 2.
ROOM DESIGNS, INCORPORATED
Balance Sheet
As of December 31, Year 2
Req C1
Total liabilities
Stockholders' Equity
Req C2
Total stockholders' equity
Total liabilities and stockholders' equity
$
$
$
Req C3
0
0
0
0
Req C4
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Req A Assets Req B Total assets Liabilities Prepare a balance sheet as of December 31, Year 2. ROOM DESIGNS, INCORPORATED Balance Sheet As of December 31, Year 2 Req C1 Total liabilities Stockholders' Equity Req C2 Total stockholders' equity Total liabilities and stockholders' equity $ $ $ Req C3 0 0 0 0 Req C4
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