Mark's Consulting experienced the following transactions for Year 1, its first year of operations, and Year 2. Assume that all transactions involve the receipt or payment of cash. Transactions for Year 1 1. Acquired $75,000 by issuing common stock. 2. Received $125,000 cash for providing services to customers. 3. Borrowed $20,000 cash from creditors. 4. Paid expenses amounting to $55,000. 5. Purchased land for $30,000 cash. Transactions for Year 2 Beginning account balances for Year 2 are: Cash Land Notes payable Common stock Retained earnings 1. Acquired an additional $25,000 from the issue of common stock. 2. Received $135,000 for providing services. 3. Paid $15,000 to creditors to reduce loan. $135,000 30,000 20,000 75,000 70,000 4. Paid expenses amounting to $70,000. 5. Paid a $12,500 dividend to the stockholders. 6. Determined that the market value of the land is $40,000. Required a. Record the effects of each accounting event under the appropriate headings for each year. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide appropriate titles for these accounts in the last column of the table. b-1. Prepare an income statement for each year accounting period. b-2. Prepare a statement of changes in stockholders' equity for each year accounting period. b-3. Prepare a year-end balance sheet for each year accounting period. b-4. Prepare a statement of cash flows for each year accounting period. c. Determine the amount of cash that is in the retained earnings account at the end of Year 1 and Year 2 e. Determine the balance in the Retained Earnings account immediately after Event 2 in Year 1 is recorded and after Event 2 in Year 2 is recorded. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 Req B4 Req C Req E
Mark's Consulting experienced the following transactions for Year 1, its first year of operations, and Year 2. Assume that all transactions involve the receipt or payment of cash. Transactions for Year 1 1. Acquired $75,000 by issuing common stock. 2. Received $125,000 cash for providing services to customers. 3. Borrowed $20,000 cash from creditors. 4. Paid expenses amounting to $55,000. 5. Purchased land for $30,000 cash. Transactions for Year 2 Beginning account balances for Year 2 are: Cash Land Notes payable Common stock Retained earnings 1. Acquired an additional $25,000 from the issue of common stock. 2. Received $135,000 for providing services. 3. Paid $15,000 to creditors to reduce loan. $135,000 30,000 20,000 75,000 70,000 4. Paid expenses amounting to $70,000. 5. Paid a $12,500 dividend to the stockholders. 6. Determined that the market value of the land is $40,000. Required a. Record the effects of each accounting event under the appropriate headings for each year. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide appropriate titles for these accounts in the last column of the table. b-1. Prepare an income statement for each year accounting period. b-2. Prepare a statement of changes in stockholders' equity for each year accounting period. b-3. Prepare a year-end balance sheet for each year accounting period. b-4. Prepare a statement of cash flows for each year accounting period. c. Determine the amount of cash that is in the retained earnings account at the end of Year 1 and Year 2 e. Determine the balance in the Retained Earnings account immediately after Event 2 in Year 1 is recorded and after Event 2 in Year 2 is recorded. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 Req B4 Req C Req E
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
Expert Solution
Step 1: Meaning of financial statement
Financial statement refers to the statement that is prepared at the end of the period to reflect the actual financial position of the company. These statements comprise an income statement, statement of change in stockholders' equity, balance sheet, and statement of cash flows. Each statement helps in preparing the next statement.
Trending now
This is a popular solution!
Step by step
Solved in 8 steps with 11 images
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