Sinclair Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared in accordance with GAAP. Acquired $68,000 cash by issuing common stock. Paid $8,700 for the materials used to make its products, all of which were started and completed during the year. Paid salaries of $4,500 to selling and administrative employees. Paid wages of $10,000 to production workers. Paid $9,600 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,600 estimated salvage value and a four-year useful life. Paid $16,000 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,000 estimated salvage value and a five-year useful life. Sold inventory to customers for $35,000 that had cost $14,000 to make. Required How these events would affect the balance sheet and income statement by recording them in a horizontal financial statements model as indicated here. The first event is recorded as an example. Note: Enter decreases to account balances with a minus sign. Event Number Balance Sheet Income Statement Assets = Stockholders' equity Cash + Inventory + Book Value Manufacturing Equipment + Book Value Office Furniture = Common stock + Retained Earnings Revenue – Expenses = Net Income 1 68,000 + + + = 68,000 + – = 2 + + + = + – = 3 + + + = + – = 4 + + + = + – = 5a + + + = + – = 5b + + + = + – = 6a + + + = + – = 6b + + + = + – = 7a + + + = + – = 7b + + + = + – = Total + + + = + – =
Sinclair Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared in accordance with GAAP. Acquired $68,000 cash by issuing common stock. Paid $8,700 for the materials used to make its products, all of which were started and completed during the year. Paid salaries of $4,500 to selling and administrative employees. Paid wages of $10,000 to production workers. Paid $9,600 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,600 estimated salvage value and a four-year useful life. Paid $16,000 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,000 estimated salvage value and a five-year useful life. Sold inventory to customers for $35,000 that had cost $14,000 to make. Required How these events would affect the balance sheet and income statement by recording them in a horizontal financial statements model as indicated here. The first event is recorded as an example. Note: Enter decreases to account balances with a minus sign. Event Number Balance Sheet Income Statement Assets = Stockholders' equity Cash + Inventory + Book Value Manufacturing Equipment + Book Value Office Furniture = Common stock + Retained Earnings Revenue – Expenses = Net Income 1 68,000 + + + = 68,000 + – = 2 + + + = + – = 3 + + + = + – = 4 + + + = + – = 5a + + + = + – = 5b + + + = + – = 6a + + + = + – = 6b + + + = + – = 7a + + + = + – = 7b + + + = + – = Total + + + = + – =
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Can I please get help and a how to explaination for this practice?
Sinclair Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the
- Acquired $68,000 cash by issuing common stock.
- Paid $8,700 for the materials used to make its products, all of which were started and completed during the year.
- Paid salaries of $4,500 to selling and administrative employees.
- Paid wages of $10,000 to production workers.
- Paid $9,600 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,600 estimated salvage value and a four-year useful life.
- Paid $16,000 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,000 estimated salvage value and a five-year useful life.
- Sold inventory to customers for $35,000 that had cost $14,000 to make.
Required
How these events would affect the balance sheet and income statement by recording them in a horizontal financial statements model as indicated here. The first event is recorded as an example.
Note: Enter decreases to account balances with a minus sign.
|
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 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