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View Ch 1 LO 9^J10^J11 In-class Saved H Exercise 1-24B Preparing financial statements and interpreting the information in those statements On January 1, Year 2, the following information was drawn from the accounting records of Zeke Company: cash of $200; land of $1,800; notes payable of $600; and common stock of $1,000. Required a. Determine the amount of retained earnings as of January 1, Year 2. b. After looking at the amount of retained earnings, the chief executive officer (CEO) wants to pay a $300 cash dividend to the stockholders. Can the company pay this dividend? Why or why not? As of January 1, Year 2, what percentage of the assets were acquired from creditors? c. d. As of January 1, Year 2, what percentage of the assets were acquired from investors? e. As of January 1, Year 2, what percentage of the assets were acquired from retained earnings? f. Create an accounting equation using percentages instead of dollar amounts on the right side of the equation. g. During Year 2, Zeke Company earned cash revenue of $500, paid cash expenses of $300, and paid a cash dividend of $50. Prepare an income statement, statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows dated December 31, Year 2. (Hint: It is helpful to record these events under an accounting equation before preparing the statements.) h. Comment on the terminology used to date each statement. i. What is the largest cash dividend that Zeke could pay on December 31, Year 2? j. If on December 31, Year 2, the land had an appraised value of $2,200, how would this affect the financial statements? OneDrive Screenshot saved The screenshot was added to your OneDrive. O X X

View Ch 1 LO 9^J10^J11 In-class Saved H Exercise 1-24B Preparing financial statements and interpreting the information in those statements On January 1, Year 2, the following information was drawn from the accounting records of Zeke Company: cash of $200; land of $1,800; notes payable of $600; and common stock of $1,000. Required a. Determine the amount of retained earnings as of January 1, Year 2. b. After looking at the amount of retained earnings, the chief executive officer (CEO) wants to pay a $300 cash dividend to the stockholders. Can the company pay this dividend? Why or why not? As of January 1, Year 2, what percentage of the assets were acquired from creditors? c. d. As of January 1, Year 2, what percentage of the assets were acquired from investors? e. As of January 1, Year 2, what percentage of the assets were acquired from retained earnings? f. Create an accounting equation using percentages instead of dollar amounts on the right side of the equation. g. During Year 2, Zeke Company earned cash revenue of $500, paid cash expenses of $300, and paid a cash dividend of $50. Prepare an income statement, statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows dated December 31, Year 2. (Hint: It is helpful to record these events under an accounting equation before preparing the statements.) h. Comment on the terminology used to date each statement. i. What is the largest cash dividend that Zeke could pay on December 31, Year 2? j. If on December 31, Year 2, the land had an appraised value of $2,200, how would this affect the financial statements? OneDrive Screenshot saved The screenshot was added to your OneDrive. O X X

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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File Tools Screens 9-10 of 29 37°F Clear View Ch_1_LO 9^J10^J11 In-class Saved Q Search Exercise 1-24B Preparing financial statements and interpreting the information in those statements On January 1, Year 2, the following information was drawn from the accounting records of Zeke Company: cash of $200; land of $1,800; notes payable of $600; and common stock of $1,000. Required a. Determine the amount of retained earnings as of January 1, Year 2. b. After looking at the amount of retained earnings, the chief executive officer (CEO) wants to pay a $300 cash dividend to the stockholders. Can the company pay this dividend? Why or why not? As of January 1, Year 2, what percentage of the assets were acquired from creditors? As of January 1, Year 2, what percentage of the assets were acquired from investors? As of January 1, Year 2, what percentage of the assets were acquired from retained earnings? Create an accounting equation using percentages instead of dollar amounts on the right side of the equation. c. d. e. f. g. During Year 2, Zeke Company earned cash revenue of $500, paid cash expenses of $300, and paid a cash dividend of $50. Prepare an income statement, statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows dated December 31, Year 2. (Hint: It is helpful to record these events under an accounting equation before preparing the statements.) h. Comment on the terminology used to date each statement. i. What is the largest cash dividend that Zeke could pay on December 31, Year 2? j. If on December 31, Year 2, the land had an appraised value of $2,200, how would this affect the financial statements? www 回 (W) OneDrive Focus Screenshot saved The screenshot was added to your OneDrive. 89 9:04 PM 1/25/2023 X 140%
Transcribed Image Text:File Tools Screens 9-10 of 29 37°F Clear View Ch_1_LO 9^J10^J11 In-class Saved Q Search Exercise 1-24B Preparing financial statements and interpreting the information in those statements On January 1, Year 2, the following information was drawn from the accounting records of Zeke Company: cash of $200; land of $1,800; notes payable of $600; and common stock of $1,000. Required a. Determine the amount of retained earnings as of January 1, Year 2. b. After looking at the amount of retained earnings, the chief executive officer (CEO) wants to pay a $300 cash dividend to the stockholders. Can the company pay this dividend? Why or why not? As of January 1, Year 2, what percentage of the assets were acquired from creditors? As of January 1, Year 2, what percentage of the assets were acquired from investors? As of January 1, Year 2, what percentage of the assets were acquired from retained earnings? Create an accounting equation using percentages instead of dollar amounts on the right side of the equation. c. d. e. f. g. During Year 2, Zeke Company earned cash revenue of $500, paid cash expenses of $300, and paid a cash dividend of $50. Prepare an income statement, statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows dated December 31, Year 2. (Hint: It is helpful to record these events under an accounting equation before preparing the statements.) h. Comment on the terminology used to date each statement. i. What is the largest cash dividend that Zeke could pay on December 31, Year 2? j. If on December 31, Year 2, the land had an appraised value of $2,200, how would this affect the financial statements? www 回 (W) OneDrive Focus Screenshot saved The screenshot was added to your OneDrive. 89 9:04 PM 1/25/2023 X 140%
File Tools View Ch_1_LO 9^J10^J11 In-class Saved EXERCISE 1-24B EXERCISE 1-24B (continued on next page) EXERCISE 1-24B (continued) Screens 11-12 of 29 37°F Clear + Q Search % EXERCISE 1-24B (continued on next page) www + Total Assets (W) OneDrive Focus % 89 回 Screenshot saved The screenshot was added to your OneDrive. 0 9:04 PM 1/25/2023 X 140%
Transcribed Image Text:File Tools View Ch_1_LO 9^J10^J11 In-class Saved EXERCISE 1-24B EXERCISE 1-24B (continued on next page) EXERCISE 1-24B (continued) Screens 11-12 of 29 37°F Clear + Q Search % EXERCISE 1-24B (continued on next page) www + Total Assets (W) OneDrive Focus % 89 回 Screenshot saved The screenshot was added to your OneDrive. 0 9:04 PM 1/25/2023 X 140%
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