(Leave no cells blank - be certain to enter \"0\" wherever required. Negative am
ID: 2424967 • Letter: #
Question
(Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. In the Cash Flow column, use the initials OA to designate operating activity, FA for financing activity, NC for net change in cash and NA for no effect. Omit the "$" sign in your response.)
David's Paint Supply experienced the following events during 2012, its first year of operation: 1. Acquired $30,000 cash from the issue of common stock. 2. Purchased inventory for $24,000 cash. 3. Sold inventory costing $13,000 for $22,000 cash. 4. Paid $1,600 for advertising expense.
Explanation / Answer
Tom's Paint Supply Effect of Events on the Financial Statements No Assets Equity Revenue Expenditure Net Income Cash Flow Cash Inventory Common Stock Retained Earnigs 1 30,000 30,000 Increase in Cash Under Financing Activity 2 (24,000) 24,000 Operating Activities 3 22,000 (13,000) 22,000 13,000 9,000 Operating Activities 4 (1,600) 7,400 1,600 (1,600) Operating Activities (7,400) Transfer to Retained Earnigs Totals 26,400 11,000 30,000 7,400 22,000 14,600 - Closing Balances Net Income of 7,400 is transferred to Retained Earnings
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.