Upton Company was started on January 1, 2011, when the owners invested $160,000
ID: 2469253 • Letter: U
Question
Upton Company was started on January 1, 2011, when the owners invested $160,000 cash in the business. During 2011, the company earned cash revenues of $120,000 and incurred cash expenses of $82,000. The company also paid cash distributions of $15,000.
Upton is a partnership with two partners, Dan and Nancy Upton. Dan invested $100,000 and Nancy invested $60,000 of the $160,000 cash that was used to start the business. Nancy was expected to assume the vast majority of the responsibility for operating the business. The partnership agreement called for Nancy to receive 60 percent of the profits and Dan the remaining 40 percent. With regard to the $15,000 distribution, Nancy withdrew $6,000 from the business and Dan withdrew $9,000.
$
$
$
$0
$
$
Upton is a corporation. The owners were issued 10,000 shares of $10 par common stock when they invested the $160,000 cash in the business.
$
$
$
$
$
$
Upton Company was started on January 1, 2011, when the owners invested $160,000 cash in the business. During 2011, the company earned cash revenues of $120,000 and incurred cash expenses of $82,000. The company also paid cash distributions of $15,000.
Explanation / Answer
Answer b. Upton Company Income Statement For the year ended Dec 31, 2011 Revenues 120,000 Less: Expenses (82,000) Net Income / (Loss) 38,000 Upton Company Capital Statement For the year ended Dec 31, 2011 Dan Capital Account Capital Introduced 100,000 Add: Net Income Share (38000 X 40%) 15,200 Less: Withdrawl by Dan / Drawings (9,000) Ending Dan Capital Balance 106,200 Nancy Capital Account Capital Introduced 60,000 Add: Net Income Share (38000 X 60%) 22,800 Less: Withdrawl by Nancy / Drawings (6,000) Ending Nancy Capital Balance 76,800 or summarized as follows Capital Account Capital Introduced 160,000 Add: Net Income Share 38,000 Less: Withdrawl by Partners (15,000) Ending Capital Balance 183,000 Upton Company Balance Sheet As of Dec 31, 2011 Assets Cash (160,000 + 120,000-82,0000 - 15000) 183,000 Total Assets 183,000 Liabilities Equity Dan Capital Account 106,200 Nanacy Capital Account 76,800 Total Liabilities & Equity 183,000 Upton Company Cash Flow Statement For the year ended Dec 31, 2011 Cash Flow from Operating Activities Inflow from Revenues 120,000 Less: Outflow for Expenses (82,000) Net Cash Flow from Operating Activities 38,000 Cash Flow From Investing Activities - Cash Flow From Financing Activities Capital Introduced by Owners 160,000 Less: Withdrawl by Partners (15,000) Net Cash flow from Financing Activities 145,000 Net Change in cash 183,000 Beginning Cash Balance - Ending Cash Balance 183,000 Answer c. Upton Company Income Statement For the year ended Dec 31, 2011 Revenues 120,000 Less: Expenses (82,000) Net Income / (Loss) 38,000 Upton Company Balance Sheet As of Dec 31, 2011 Assets Cash (160,000 + 120,000-82,0000 - 15000) 183,000 Total Assets 183,000 Liabilities - Stockholders' Equity Common Stock (10000 Shares @ $10) 100,000 Paid in Capital in Excess of Par 60,000 Total paid in Capital 160,000 Retained Earnings Opening Balance - Add: Net Icome 38,000 Less: Dividend Paid (15,000) Ending Balance - Retained Earnings 23,000 Total Stockholders' Equity 183,000 Total Liabilities & Equity 183,000 Upton Company Cash Flow Statement For the year ended Dec 31, 2011 Cash Flow from Operating Activities Inflow from Revenues 120,000 Less: Outflow for Expenses (82,000) Net Cash Flow from Operating Activities 38,000 Cash Flow From Investing Activities - Cash Flow From Financing Activities Common Stock Issued 160,000 Dividend Paid (15,000) Net Cash flow from Financing Activities 145,000 Net Change in cash 183,000 Beginning Cash Balance - Ending Cash Balance 183,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.