The following transactions pertain to Smith Training Company for Year 1: January 30 Established the business when it acquired $51,000 cash from the issue of common stock. February 1 Paid rent for office space for two years, $33,000 cash.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The following transactions pertain to Smith Training Company for Year 1:

January 30 Established the business when it acquired $51,000 cash from the issue of common stock.
February 1 Paid rent for office space for two years, $33,000 cash.
April 10 Purchased $800 of supplies on account.
July 1 Received $22,500 cash in advance for services to be provided over the next year.
July 20 Paid $600 of the accounts payable from April 10.
August 15 Billed a customer $10,000 for services provided during August.
September 15 Completed a job and received $3,400 cash for services rendered.
October 1 Paid employee salaries of $37,500 cash.
October 15 Received $9,500 cash from accounts receivable.
November 16 Billed customers $31,000 for services rendered on account.
December 1 Paid a dividend of $1,200 cash to the stockholders.
December 31 Adjusted records to recognize the services provided on the contract of July 1.
December 31 Recorded $2,250 of accrued salaries as of December 31.
December 31 Recorded the rent expense for the year. (See February 1.)
December 31 Physically counted supplies; $110 was on hand at the end of the period.

 

d. Prepare the income statement,

statement of changes in stockholders’ equity,

balance sheet, and

statement of cash flows for Year 1.

Note: Statement of Cash Flows only, enter any decreases to account balances and cash outflows with a minus sign.

 

 
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