Question

In 2016, Lee Inc. billed its customers $57,500 for services performed. The company collected $41,500 of the amount billed. Lee incurred $37,000 of other operating expenses on account. Lee paid $24,300 of the accounts payable. Lee acquired $39,000 cash from the issue of common stock. The company invested $19,000 cash in the purchase of land.
Required
(Hint: Identify the six events described in the paragraph and record them in general ledger accounts under an accounting equation before attempting to answer the questions.) Use the preceding information to answer the following questions: (Enter any decreases to account balances with a minus sign.)
LEE INC.
Effects of Events on the General Ledger Accounts
Assets
Event Cash Accounts Recievable Land =
Liabilities
Accounts Payable
+ Common Stock + Retained Earnings
1. Sales on Account
2.Collected accounts recievable
3. incurred expense
4. paid accounts payable
5. issue stock
6. purchase land
Totals
a. What amount of revenue will Lee report on the 2016 income statement?
Revenue Recognized:
b. What amount of cash flow from revenue will Lee report on the statement of cash flows?
Cash flow from revenue:
c. What is the net income for the period?
net income:
d. What is the net cash flow from operating activities for the period? (Enter cash outflows as negative amounts.)
net cash flow from operating activities:
e. What is the amount of net cash flow from investing activities? (Enter cash outflows as negative amounts.)
net cash flow from investing activities:
f. What is the amount of net cash flow from financing activities? (Enter cash outflows as negative amounts.)
net cash flow from financing activities:
g. What amounts of total assets, liabilities, and equity will be reported on the year-end balance sheet?
Amount
total assets
total liabilities
total equity

Answer 1

Answer:

               Assets                                =  liabilities       +  equity

        Cash    Accounts rec.    Land = Accounts pay.  C. Stock + Ret. E.

Event

1                    57,500                                                                       57,500

2      41,500   -41,500

3                                                           37,000                               -37,000

4     -24,300                                        -24,300

5     39,000                                                                    39,000

6    -19,000                             19,000

a. What amount of revenue will Lee report on the 2016 income statement?

$57,500

b. What amount of cash flow from revenue will Lee report on the statement of cash flows?

$41,500

c. What is the net income for the period?

$20,500

d. What is the net cash flow from operating activities for the period?

$17,200

e. What is the amount of net cash flow from investing activities?

-$19,000

f. What is the amount of net cash flow from financing activities?

$39,000

g. What amounts of total assets, liabilities, and equity will be reported on the year-end balance sheet?

total assets  = $72,200

total liabilities   = $12,700

total equity  = $59,500