Malco Enterprises issued $27,000 of common stock when the company was started. In addition, Malco borrowed $53,000 from a local bank on July 1, Year 1. The note had a 5 percent annual interest rate and a one-year term to maturity. Malco Enterprises recognized $91,200 of revenue on account in Year 1 and $102,200 of revenue on account in Year 2. Cash collections of accounts receivable were $78,300 in Year 1 and $88,500 in Year 2. Malco paid $54,300 of other operating expenses in Year 1 and $62,000 of other operating expenses in Year 2. Malco repaid the loan and interest at the maturity date. Required Based on this information given above, record the events in the accounting equation and answer the following questions. Note: Enter any decreases to account balances with a minus sign. MALCO ENTERPRISES Effect of Events on the Financial Statements Balance Sheet Assets Liabilities + Stockholders' Equity Events Cash + Accounts Receivable Notes Payable Interest Payable Common Stock + Retained Earnings Year 1 1. Common Stock 2. Loan 3. Revenue 4. Collections of Accounts Receivable 5. Operating Expenses 6. Interest Accrued Ending Balance Year 2 Beginning Balance 1. Revenue 2. Collections of Accounts Receivable 3. Operating Expenses - 4. Interest Accrued 5. Payment of Interest & Principles Ending Balance 0+ 0 = 0+ 0+ 0+ 0 0 0 0 0 0 0 0+ 0+ 0+ 0+ 0
Malco Enterprises issued $27,000 of common stock when the company was started. In addition, Malco borrowed $53,000 from a local bank on July 1, Year 1. The note had a 5 percent annual interest rate and a one-year term to maturity. Malco Enterprises recognized $91,200 of revenue on account in Year 1 and $102,200 of revenue on account in Year 2. Cash collections of accounts receivable were $78,300 in Year 1 and $88,500 in Year 2. Malco paid $54,300 of other operating expenses in Year 1 and $62,000 of other operating expenses in Year 2. Malco repaid the loan and interest at the maturity date. Required Based on this information given above, record the events in the accounting equation and answer the following questions. Note: Enter any decreases to account balances with a minus sign. MALCO ENTERPRISES Effect of Events on the Financial Statements Balance Sheet Assets Liabilities + Stockholders' Equity Events Cash + Accounts Receivable Notes Payable Interest Payable Common Stock + Retained Earnings Year 1 1. Common Stock 2. Loan 3. Revenue 4. Collections of Accounts Receivable 5. Operating Expenses 6. Interest Accrued Ending Balance Year 2 Beginning Balance 1. Revenue 2. Collections of Accounts Receivable 3. Operating Expenses - 4. Interest Accrued 5. Payment of Interest & Principles Ending Balance 0+ 0 = 0+ 0+ 0+ 0 0 0 0 0 0 0 0+ 0+ 0+ 0+ 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Ashvinn
Transcribed Image Text:Malco Enterprises issued $27,000 of common stock when the company was started. In addition, Malco borrowed $53,000 from a local
bank on July 1, Year 1. The note had a 5 percent annual interest rate and a one-year term to maturity. Malco Enterprises recognized
$91,200 of revenue on account in Year 1 and $102,200 of revenue on account in Year 2. Cash collections of accounts receivable were
$78,300 in Year 1 and $88,500 in Year 2. Malco paid $54,300 of other operating expenses in Year 1 and $62,000 of other operating
expenses in Year 2. Malco repaid the loan and interest at the maturity date.
Required
Based on this information given above, record the events in the accounting equation and answer the following questions.
Note: Enter any decreases to account balances with a minus sign.
MALCO ENTERPRISES
Effect of Events on the Financial Statements
Balance Sheet
Assets
Liabilities
+
Stockholders' Equity
Events
Cash
+
Accounts
Receivable
Notes
Payable
Interest
Payable
Common
Stock
+
Retained
Earnings
Year 1
1. Common Stock
2. Loan
3. Revenue
4. Collections of Accounts Receivable
5. Operating Expenses
6. Interest Accrued
Ending Balance
Year 2
Beginning Balance
1. Revenue
2. Collections of Accounts Receivable
3. Operating Expenses -
4. Interest Accrued
5. Payment of Interest & Principles
Ending Balance
0+
0 =
0+
0+
0+
0
0
0
0
0
0
0
0+
0+
0+
0+
0
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
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