1. The two additional adjusting entries are:
•Rent Expenses $5,225
•Revenue $3,700
2. Balance sheet reported is $42,000
3. Netnet cash flow from operating activities is $37,500
4. Rent expenset is $5,225$5,225
5. Totaltotal liabilities is $23,770
6. Supplies expense $800
7. Unearnedunearned revenue is $3,700
8. Netnet cash flow is ($10,000)
9. Totaltotal expenses is $24,125
10. Total service revenue is $71,700
11. Cash cash Cash flows from financing activities is $45,600
12. Netnet income is $26,216
13. Retainedretained earnings is $43,216
1. Additional adjusting entries that must be made are:
•Part of the Prepaid rent of the amount of $5,225 will be allocated to the rent expense
Rent Expenses $5,225
($5,700 x 11/12 = $5,225)
•Part of the revenue received in advance of the amount of wi$3,700ll be recognized as revenue
Revenue
($7,400 x 6/12 = $3,700)
2. Beginning balance $32,000
Add Cost of Land purchased $32,000
Less Cost of Land sold ($22,000)
Ending balance $42,000
3.Cash received from customers
Received cash in advance as a retainer for services to be performed monthly over the coming year $7,400
Received cash collections from accounts receivable $54,000
Cash Paid to Suppliers:
Paid cash in advance for a one-year lease for office space $(5,700)
Made a cash payment on accounts payable $(20,000)
Cash flow from operating activities $35,700
4.Rent for 12 months $5,700
Less Rent per months $475
($5,700/12)
Rent expense $5,225
5. Accounts Payable:
Beginning balance $23,000
Cash payment on accounts payable $(20,000)
Purchased supplies on account $970
Incurred other operating expenses on account $13,000
Balance of Accounts Payable $16,970
Unearned Income $3,700
Accrued salaries expense $5,100
Total Liabilities $23,770
($16,970+$3,700+$5,100)
6.Supplies purchased $970
Less Supplies on hand ($170)
Supplies expense $800
7.Revenue received ion July 1 for 12 months contract $7,400
50% earned in the year $(3,700)
Unearned revenue of the balance sheet $3,700
8. Cash used to purchase land $(32,000)
Proceeds from the sale of land $22,000
Cash used by investing activities $(10,000)
9. Lease for office space $5,225
Supplies $800
Other operating expenses $13,000
Salaries expense $5,100
Total expenses $24,125
10. Revenue earned from retainer received in advance $3,700
Service revenue on account $68,000
Total Service Revenue $71,700
11. Issue of common stock $48,000
Cash dividend to the stockholders $(2,400)
Cash provided by financing activities $45,600
12.Total Service Revenue $71,700
($3,700+$68,000)
Interest Revenue $116
Total expenses $(45,600)
Net income $26,216
13. Retained Earnings on the balance sheet is:
Beginning balance $17,000
Net income for the year $26,216
Ending balance $43,216
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