At January 1 (beginning of its fiscal year), Freeman, Incorporated, a financial services consulting firm, reported the following account balances (in thousands, except for par and market value per share): Cash Short-term investments Accounts receivable. Supplies Prepaid expenses Office equipment $2,000 460 3,720 200 4,920 1,200 Accounts payable Unearned revenue Salaries payable Short-term note payable Common stock ($1 par value) Additional paid-in capital Retained earnings. $260 1,420 970 830 55 6,805 2,160 a. Received $10,500 cash for consulting services rendered. b. Issued 20 additional shares of common stock at a market price of $125 per share. c. Purchased $740 of office equipment, paying 25 percent in cash and owing the rest on a short-term note. d. Received $940 from clients for consulting services to be performed in the next year. e. Bought $570 of supplies on account. f. Incurred and paid $1,950 in utilities for the current year. g. Consulted for clients in the current year for fees totaling $1,720, due from clients in the next year. h. Received $3,280 from clients paying on their accounts. i. Incurred $6,310 in salaries in the current year, paying $5,450 and owing the rest (to be paid next year). j. Purchased $1,330 in short-term investments and paid $850 for insurance coverage beginning in the next fiscal year. k. Received $15 in interest revenue earned in the current year on short-term investments. Required: Prepare an unadjusted classified income statement for the current year ended December 31. (Ignore income taxes.) Note: Enter your answers in thousands, not in dollars.
At January 1 (beginning of its fiscal year), Freeman, Incorporated, a financial services consulting firm, reported the following account balances (in thousands, except for par and market value per share): Cash Short-term investments Accounts receivable. Supplies Prepaid expenses Office equipment $2,000 460 3,720 200 4,920 1,200 Accounts payable Unearned revenue Salaries payable Short-term note payable Common stock ($1 par value) Additional paid-in capital Retained earnings. $260 1,420 970 830 55 6,805 2,160 a. Received $10,500 cash for consulting services rendered. b. Issued 20 additional shares of common stock at a market price of $125 per share. c. Purchased $740 of office equipment, paying 25 percent in cash and owing the rest on a short-term note. d. Received $940 from clients for consulting services to be performed in the next year. e. Bought $570 of supplies on account. f. Incurred and paid $1,950 in utilities for the current year. g. Consulted for clients in the current year for fees totaling $1,720, due from clients in the next year. h. Received $3,280 from clients paying on their accounts. i. Incurred $6,310 in salaries in the current year, paying $5,450 and owing the rest (to be paid next year). j. Purchased $1,330 in short-term investments and paid $850 for insurance coverage beginning in the next fiscal year. k. Received $15 in interest revenue earned in the current year on short-term investments. Required: Prepare an unadjusted classified income statement for the current year ended December 31. (Ignore income taxes.) Note: Enter your answers in thousands, not in dollars.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
100%

Transcribed Image Text:At January 1 (beginning of its fiscal year), Freeman, Incorporated, a financial services consulting firm, reported the following account balances (in thousands, except for par and market value per share):
**Assets:**
- Cash: $2,000
- Short-term investments: $460
- Accounts receivable: $3,720
- Supplies: $200
- Prepaid expenses: $4,920
- Office equipment: $1,200
**Liabilities:**
- Accounts payable: $260
- Unearned revenue: $1,420
- Salaries payable: $970
- Short-term note payable: $830
**Equity:**
- Common stock ($1 par value): $55
- Additional paid-in capital: $6,805
- Retained earnings: $2,160
**Transactions:**
a. Received $10,500 cash for consulting services rendered.
b. Issued 20 additional shares of common stock at a market price of $125 per share.
c. Purchased $740 of office equipment, paying 25 percent in cash and owing the rest on a short-term note.
d. Received $940 from clients for consulting services to be performed in the next year.
e. Bought $570 of supplies on account.
f. Incurred and paid $1,950 in utilities for the current year.
g. Consulted for clients in the current year for fees totaling $1,720, due from clients in the next year.
h. Received $3,280 from clients paying on their accounts.
i. Incurred $6,310 in salaries in the current year, paying $5,450 and owing the rest (to be paid next year).
j. Purchased $1,330 in short-term investments and paid $850 for insurance coverage beginning in the next fiscal year.
k. Received $15 in interest revenue earned in the current year on short-term investments.
**Required:**
Prepare an unadjusted classified income statement for the current year ended December 31. (Ignore income taxes.)
**Note:** Enter your answers in thousands, not in dollars.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON

Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education