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
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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.
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