Dakota Company experienced the following events during Year 2: 1. Acquired $30,500 cash from the issue of common stock. 2. Paid $12,400 cash to purchase land. 3. Borrowed $10,700 cash. 4. Provided services for $20,500 cash. 5. Paid $1,500 cash for utilities expense. 6. Paid $16,900 cash for other operating expenses. 7. Paid a $2,100 cash dividend to the stockholders. 8. Determined that the market value of the land purchased in Event 2 is now $12,700. Required a. The January 1, Year 2, account balances are shown in the following accounting equation. Record the eight events in the appropriate accounts under an accounting equation. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example. b-1. Prepare an income statement for the Year 2 accounting period. b-2. Prepare a statement of changes in equity for the Year 2 accounting period. b-3. Prepare a year-end balance sheet for the Year 2 accounting period. b-4. Prepare a statement of cash flows for the Year 2 accounting period. c-1. Determine the percentage of assets that were provided by retained earnings. c-2. How much cash is in the retained earnings account? d. Based on the December 31, Year 2, balance sheet, what is the largest cash dividend Dakota could pay?
Dakota Company experienced the following events during Year 2: 1. Acquired $30,500 cash from the issue of common stock. 2. Paid $12,400 cash to purchase land. 3. Borrowed $10,700 cash. 4. Provided services for $20,500 cash. 5. Paid $1,500 cash for utilities expense. 6. Paid $16,900 cash for other operating expenses. 7. Paid a $2,100 cash dividend to the stockholders. 8. Determined that the market value of the land purchased in Event 2 is now $12,700. Required a. The January 1, Year 2, account balances are shown in the following accounting equation. Record the eight events in the appropriate accounts under an accounting equation. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example. b-1. Prepare an income statement for the Year 2 accounting period. b-2. Prepare a statement of changes in equity for the Year 2 accounting period. b-3. Prepare a year-end balance sheet for the Year 2 accounting period. b-4. Prepare a statement of cash flows for the Year 2 accounting period. c-1. Determine the percentage of assets that were provided by retained earnings. c-2. How much cash is in the retained earnings account? d. Based on the December 31, Year 2, balance sheet, what is the largest cash dividend Dakota could pay?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Dakota Company experienced the following events during Year 2:
1. Acquired $30,500 cash from the issue of common stock.
2. Paid $12,400 cash to purchase land.
3. Borrowed $10,700 cash.
4. Provided services for $20,500 cash.
5. Paid $1,500 cash for utilities expense.
6. Paid $16,900 cash for other operating expenses.
7. Paid a $2,100 cash dividend to the stockholders.
8. Determined that the market value of the land purchased in Event 2 is now $12,700.
Required
a. The January 1, Year 2, account balances are shown in the following accounting equation. Record the eight events in the appropriate
accounts under an accounting equation. Record the amounts of revenue, expense, and dividends in the Retained Earnings column.
Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example.
b-1. Prepare an income statement for the Year 2 accounting period.
b-2. Prepare a statement of changes in equity for the Year 2 accounting period.
b-3. Prepare a year-end balance sheet for the Year 2 accounting period.
b-4. Prepare a statement of cash flows for the Year 2 accounting period.
c-1. Determine the percentage of assets that were provided by retained earnings.
c-2. How much cash is in the retained earnings account?
d. Based on the December 31, Year 2, balance sheet, what is the largest cash dividend Dakota could pay?
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