Answer:
Lee Inc.
a. Amount of revenue Lee will report on the Year 1 income statement:
= $62,000
b. Amount of cash flow from revenue to report on the statement of cash flows:
= $51,000
c. The net income for the period:
= $23,000
d. The net cash flow from operating activities for the period:
= $20,000
e. The amount of net cash flow from investing activities:
= ($21,000)
f. The amount of net cash flow from financing activities:
= $40,000
f. Amounts of total assets, liabilities, and equity on the year-end balance sheet:
Total assets = $71,000
Total liabilities = $8,000
Total Equity = $63,000
Explanation:
a) Data and Calculations:
Service Revenue = $62,000
Cash collection from customers $51,000
Outstanding (Accounts Receivable) $11,000 ($62,000 - 51,000)
Operating expense on account = $39,000
Cash paid on account 31,000
Outstanding (Accounts Payable) $8,000
Common Stock $40,000
Land $21,000
b) Cash Account:
Cash collection from customers $51,000
Cash paid on account (31,000)
Common Stock 40,000
Land (21,000)
Cash balance $39,000
c) Income Statement:
Service Revenue $62,000
Expenses (39,000)
Net Income $23,000
d) Assets:
Cash $39,000
Accounts Receivable 11,000
Land 21,000
Total $71,000
e) Liabilities:
Accounts Payable $8,000
Common Stock 40,000
Net Income 23,000
Total $71,000
f) Statement of Cash Flows:
Operating activities:
Cash collection from customers $51,000
Cash paid to suppliers (31,000)
Net cash from operating activities $20,000
Investing activities:
Land ($21,000)
Financing activities:
Common Stock $40,000
