Stuart Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared in accordance with GAAP. 1. Acquired $55,000 cash by issuing common stock. 2. Paid $7,200 for the materials used to make its products, all of which were started and completed during the year. 3. Paid salaries of $4,100 to selling and administrative employees. 4. Paid wages of $6,800 to production workers. 5. Paid $7,900 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,900 estimated salvage value and a three-year useful life. 6. Paid $12,700 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,300 estimated salvage value and a three-year useful life. 7. Sold inventory to customers for $26,800 that had cost $13,900 to make. Required Indicate how these events would affect the balance sheet and income statement by recording them in a horizontal financial statements model as indicated here. The first event is recorded as an example. (Enter any decreases to account balances with a minus sign. For changes on the Statement of Cash Flows, indicate whether the item is an operating activity (OA), investing activity (IA), financing activity (FA).) Event No. 1 2 3 4 5a Cash + Inventory + 55,000 + + Assets +++ + + + + + Balance Sheet BV Manuf. Equip. + + + + + + BV Office Furn. = Stockholders' Equity Ret. Ear. = = = = = Common stock Prou + 55,000+ + + + Rev. Income Statement - Exp. = = = = = = Net Inc. Cash Flow 55,000 FA
Stuart Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared in accordance with GAAP. 1. Acquired $55,000 cash by issuing common stock. 2. Paid $7,200 for the materials used to make its products, all of which were started and completed during the year. 3. Paid salaries of $4,100 to selling and administrative employees. 4. Paid wages of $6,800 to production workers. 5. Paid $7,900 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,900 estimated salvage value and a three-year useful life. 6. Paid $12,700 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,300 estimated salvage value and a three-year useful life. 7. Sold inventory to customers for $26,800 that had cost $13,900 to make. Required Indicate how these events would affect the balance sheet and income statement by recording them in a horizontal financial statements model as indicated here. The first event is recorded as an example. (Enter any decreases to account balances with a minus sign. For changes on the Statement of Cash Flows, indicate whether the item is an operating activity (OA), investing activity (IA), financing activity (FA).) Event No. 1 2 3 4 5a Cash + Inventory + 55,000 + + Assets +++ + + + + + Balance Sheet BV Manuf. Equip. + + + + + + BV Office Furn. = Stockholders' Equity Ret. Ear. = = = = = Common stock Prou + 55,000+ + + + Rev. Income Statement - Exp. = = = = = = Net Inc. Cash Flow 55,000 FA
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 1PB: Consider the following situations and determine (1) which type of liability should be recognized...
Related questions
Question
100%
I need extreme help with the values and figuring out where they belong on the sgatem
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning