Following information is from first month of operations. Make a Statement of cash flows 1/1 Ray incorporated B&C Inc and invested $100,000 in exchange for 100,000 shares of $1 par common stock. 1/1 Paid $9,000 for the first 6 months of rent (Jan-June) on a production facility. 1/1 Paid $4,200 for an insurance premium on a one-year policy. 1/1  Purchased a $15,000 piece of factory equipment with a 3% Note Payable which will be paid in full at the end of 2 years. This equipment has an estimated life of 5 years and an estimated residual value of $3,000. 1/2  Purchased $600 of supplies from Office Hoard Corp on account with terms 2/10, n/30. 1/3  Purchased $50,000 of raw materials from Chemical Supply Inc on account. 1/5 Requisitioned $10,000 of raw materials to begin working on Job A (a batch of doodads) and another $7,000 of raw materials to begin working on Job B. 1/8 Paid off account with Office Hoard Corp with cash. 1/10  Incurred $2,500 worth of direct labor costs while working on Job A and another $1,800 of direct labor went to Job B. 1/11  Allocated $5,000 worth of factory overhead (based on a previously calculated rate) to Job A and $3,600 is allocated to Job B. 1/13 Job A was completed. 1/16  Job A was sold for $36,000 to Retail Corp on account with FOB destination terms. 1/17  Paid $800 for delivery charges for Job A. 1/20 Incurred (but did not pay) factory overhead costs as follows: indirect wages, $4,200; indirect materials, $1,850; utilities, $2,300. 1/23 Paid all previously incurred wages with cash. 1/28 Paid $5,000 for advertising services with cash. 1/30 Incurred $1,500 of legal expenses which will be paid on February 10th. 1/30 Received $10,000 from Retail Corp to partially pay off their account. 1/30  B&C Inc issued 50,000 shares of $1 par common stock in exchange for $75,000 from Elizabeth (a new investor). 1/31  Paid $25,000 to Chemical Supply Inc to partially pay off the account. 1/31 Announced a $3,000 cash dividend which will be distributed on February 5th. 1/31 There are $120 of supplies on hand.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Following information is from first month of operations. Make a Statement of cash flows

1/1 Ray incorporated B&C Inc and invested $100,000 in exchange for 100,000 shares of $1 par common stock.

1/1 Paid $9,000 for the first 6 months of rent (Jan-June) on a production facility.

1/1 Paid $4,200 for an insurance premium on a one-year policy.

1/1  Purchased a $15,000 piece of factory equipment with a 3% Note Payable which will be paid in full at the end of 2 years. This equipment has an estimated life of 5 years and an estimated residual value of $3,000.

1/2  Purchased $600 of supplies from Office Hoard Corp on account with terms 2/10, n/30.

1/3  Purchased $50,000 of raw materials from Chemical Supply Inc on account.

1/5 Requisitioned $10,000 of raw materials to begin working on Job A (a batch of doodads) and another $7,000 of raw materials to begin working on Job B.

1/8 Paid off account with Office Hoard Corp with cash.

1/10  Incurred $2,500 worth of direct labor costs while working on Job A and another $1,800 of direct labor went to Job B.

1/11  Allocated $5,000 worth of factory overhead (based on a previously calculated rate) to Job A and $3,600 is allocated to Job B.

1/13 Job A was completed.

1/16  Job A was sold for $36,000 to Retail Corp on account with FOB destination terms.

1/17  Paid $800 for delivery charges for Job A.

1/20 Incurred (but did not pay) factory overhead costs as follows: indirect wages, $4,200; indirect materials, $1,850; utilities, $2,300.

1/23 Paid all previously incurred wages with cash.

1/28 Paid $5,000 for advertising services with cash.

1/30 Incurred $1,500 of legal expenses which will be paid on February 10th.

1/30 Received $10,000 from Retail Corp to partially pay off their account.

1/30  B&C Inc issued 50,000 shares of $1 par common stock in exchange for $75,000 from Elizabeth (a new investor).

1/31  Paid $25,000 to Chemical Supply Inc to partially pay off the account.

1/31 Announced a $3,000 cash dividend which will be distributed on February 5th.

1/31 There are $120 of supplies on hand.

Balance Sheet
ASSETS
Current Assets
Cash
1,281,000.00
Accounts receivable
25,000.00
Prepaid insurance
Prepaid rent
Supplies
Material inventory
4,200.00
9,000.00
120.00
31,150.00
WIP
12,400.00
Total current assets
209,970.00
Plant, Property & Equipment
Equipment
(-) Accumulated depreciation
Total plant, property & equipment
Total Assets
15,000.00
200.00
14,800.00
224,770.00
LIABILITIES
Current Liabilities
Accounts payable
Dividend payable
25,000.00
3,000.00
Total current liabilities
28,000.00
Long Term Liabilities
Notes paayable
Total long term liabilities
Stockholders' Equity
15,000.00
15,000.00
Common stock
150,000.00
Additional paid-in cappital
Total paid in capital
Retained earnings
Total stockcholders' equity
Total Liabilities & Stockholders' Equity
25,000.00
175,000.00
6,770.00
181,770.00
224,770.00
Transcribed Image Text:Balance Sheet ASSETS Current Assets Cash 1,281,000.00 Accounts receivable 25,000.00 Prepaid insurance Prepaid rent Supplies Material inventory 4,200.00 9,000.00 120.00 31,150.00 WIP 12,400.00 Total current assets 209,970.00 Plant, Property & Equipment Equipment (-) Accumulated depreciation Total plant, property & equipment Total Assets 15,000.00 200.00 14,800.00 224,770.00 LIABILITIES Current Liabilities Accounts payable Dividend payable 25,000.00 3,000.00 Total current liabilities 28,000.00 Long Term Liabilities Notes paayable Total long term liabilities Stockholders' Equity 15,000.00 15,000.00 Common stock 150,000.00 Additional paid-in cappital Total paid in capital Retained earnings Total stockcholders' equity Total Liabilities & Stockholders' Equity 25,000.00 175,000.00 6,770.00 181,770.00 224,770.00
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