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ID: 2395300 • Letter: I
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Transactions Using Accrual Accounting Terry Mason organized The Fith Season at the beginning of February 20Y4. During February, The Fifth Seeson entered into the following transaction:s a. Terry Mason invested $33,000 in The Fifth Season in exchange for common stock. b. Paid $6,930 on February 1 for an insurance premium on a 1-ycar policy Purchased supplies on account, $2.460 Received fees of $62,180 during Febr aid expenses as follows: wages, $18,600; rent, $3,100; utlities, $1,SS0; and miscellaneous, $1,705 Paid dividends of $9,525 Record the preceding transactions using the integrated financial statement framework. After each transaction, enter a balance for each item. If an amount box does not require an entry, leave it blank, Enter account decreases and net cash outflows as negative Balance Sheet of Cash +Stockholders' Equity Statement of Cash FlowsExplanation / Answer
Assets =
Liabilities +
Equity
Cash
Supplies
Prepaid Insurance
Accounts Payable
Common Stock
Retained earnings
a
$ 33,000.00
$ 33,000.00
b
$ (6,930.00)
$ 6,930.00
Balance
$ 26,070.00
$ -
$ 6,930.00
$ -
$ 33,000.00
$ -
c
$ 2,460.00
$ 2,460.00
Balance
$ 26,070.00
$ 2,460.00
$ 6,930.00
$ 2,460.00
$ 33,000.00
$ -
d
$ 62,180.00
$ 62,180.00
Balance
$ 88,250.00
$ 2,460.00
$ 6,930.00
$ 2,460.00
$ 33,000.00
$ 62,180.00
e
$ (24,955.00)
$ (24,955.00)
Balance
$ 63,295.00
$ 2,460.00
$ 6,930.00
$ 2,460.00
$ 33,000.00
$ 37,225.00
f
$ (9,525.00)
$ (9,525.00)
Balance
$ 53,770.00
$ 2,460.00
$ 6,930.00
$ 2,460.00
$ 33,000.00
$ 27,700.00
Note* Dividends paid Decreases retained earnings hence shown as negative value.
Statement of cash Flow
a
Common Stock
$ 33,000.00
b
Prepaid Insurance
$ (6,930.00)
d
Revenue
$ 62,180.00
e
Expenses
$ (24,955.00)
f
Dividends
$ (9,525.00)
Balance Cash
$ 53,770.00
Income Statement
d
Revenue
$ 62,180.00
e
Wages
$ (18,600.00)
e
Rent
$ (3,100.00)
e
Utilities
$ (1,550.00)
e
Miscellaneous Expense
$ (1,705.00)
Balance
$ 37,225.00
Assets =
Liabilities +
Equity
Cash
Supplies
Prepaid Insurance
Accounts Payable
Common Stock
Retained earnings
a
$ 33,000.00
$ 33,000.00
b
$ (6,930.00)
$ 6,930.00
Balance
$ 26,070.00
$ -
$ 6,930.00
$ -
$ 33,000.00
$ -
c
$ 2,460.00
$ 2,460.00
Balance
$ 26,070.00
$ 2,460.00
$ 6,930.00
$ 2,460.00
$ 33,000.00
$ -
d
$ 62,180.00
$ 62,180.00
Balance
$ 88,250.00
$ 2,460.00
$ 6,930.00
$ 2,460.00
$ 33,000.00
$ 62,180.00
e
$ (24,955.00)
$ (24,955.00)
Balance
$ 63,295.00
$ 2,460.00
$ 6,930.00
$ 2,460.00
$ 33,000.00
$ 37,225.00
f
$ (9,525.00)
$ (9,525.00)
Balance
$ 53,770.00
$ 2,460.00
$ 6,930.00
$ 2,460.00
$ 33,000.00
$ 27,700.00
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