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Required: 1. On what basis did Julio prepare the income statement? 2. Reconstruct the correct entries under accrual accounting principles and post the effects to T-accounts. 3. Prepare an accrual-based income statement, statement of stockholder's equity (only one shareholder), and a classified balance sheet. Complete this question by entering your answers in the tabs below. Required 1 Required 2a Required 2b Required 3a Required 3b Required 3c Prepare a statement of stockholder's equity (only one shareholder).

Required: 1. On what basis did Julio prepare the income statement? 2. Reconstruct the correct entries under accrual accounting principles and post the effects to T-accounts. 3. Prepare an accrual-based income statement, statement of stockholder's equity (only one shareholder), and a classified balance sheet. Complete this question by entering your answers in the tabs below. Required 1 Required 2a Required 2b Required 3a Required 3b Required 3c Prepare a statement of stockholder's equity (only one shareholder).

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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a. Received the following contributions (at fair value) to the business from the owner when it was started in exchange for 1,000 shares of $1 par value common stock in the new company: Building Tools and equipment b. Earned service fees during the current year of $87,000; of the cash collected, $20,000 was for deposits from customers on work to be done by Julio in the next year c. Received the cash dividends on shares of ABC Industrial stock purchased by Julio Estela six years earlier (the stock was not owned by the company). $21,000 Land 17,000 Cash d. Incurred operating expenses during the current year of $61,000. e. Determined amount of supplies on hand (unused) at the end of the current year as $700. f. A temporary employee, subsequently fired, stole $500 cash from the business. There was no insurance coverage for theft. g. Purchased tools and equipment during the year. Required: 1. On what basis did Julio prepare the income statement? 2. Reconstruct the correct entries under accrual accounting principles and post the effects to T-accounts. 3. Prepare an accrual-based income statement, statement of stockholder's equity (only one shareholder), and a classified balance sheet. $20,000 1,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2a Required 2b Required 3a Required 3b Beginning balance Stock issuance Prepare a statement of stockholder's equity (only one shareholder). Common Stock Additional Paid- in Capital Retained Earnings Ending balance $ 0 $ 0 $ < Required 3a Required 3c Total Stockholder's Equity 0 $ Required 3c > 0
Transcribed Image Text:a. Received the following contributions (at fair value) to the business from the owner when it was started in exchange for 1,000 shares of $1 par value common stock in the new company: Building Tools and equipment b. Earned service fees during the current year of $87,000; of the cash collected, $20,000 was for deposits from customers on work to be done by Julio in the next year c. Received the cash dividends on shares of ABC Industrial stock purchased by Julio Estela six years earlier (the stock was not owned by the company). $21,000 Land 17,000 Cash d. Incurred operating expenses during the current year of $61,000. e. Determined amount of supplies on hand (unused) at the end of the current year as $700. f. A temporary employee, subsequently fired, stole $500 cash from the business. There was no insurance coverage for theft. g. Purchased tools and equipment during the year. Required: 1. On what basis did Julio prepare the income statement? 2. Reconstruct the correct entries under accrual accounting principles and post the effects to T-accounts. 3. Prepare an accrual-based income statement, statement of stockholder's equity (only one shareholder), and a classified balance sheet. $20,000 1,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2a Required 2b Required 3a Required 3b Beginning balance Stock issuance Prepare a statement of stockholder's equity (only one shareholder). Common Stock Additional Paid- in Capital Retained Earnings Ending balance $ 0 $ 0 $ < Required 3a Required 3c Total Stockholder's Equity 0 $ Required 3c > 0
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