questions attached a a file
EXERCISE 2-1 EXERCISE 2-3 (cont.) a. Milea, Inc. General Ledger Accounts For the Year Ended December 31, 2018 Assets = Liabilities + Stockholders’ Equity Event Cash Acct. Rec. = Salaries Pay. + Common Stock Retained Earn. Acct. Title for RE 1. 20,000 20,000 2. 3. 4. 5. 6. Totals 63,500 = + 41,500 b. Milea, Inc. Income Statement For the Year Ended December 31, 2018 Revenue Expenses Total Expenses Net Income EXERCISE 2-3 b Solution (cont.) Milea, Inc. Statement of Changes in Stockholders’ Equity For the Year Ended December 31, 2018 Beginning Common Stock Plus: Common Stock Issued Ending Common Stock Beginning Retained Earnings Plus: Net Income Less: Dividends Ending Retained Earnings Total Stockholders’ Equity $61,500 Milea, Inc. Balance Sheet As of December 31, 2018 Assets Cash Accounts Receivable Total Assets Liabilities Salaries Payable Total Liabilities Stockholders’ Equity Common Stock Retained Earnings Total Stockholders’ Equity Total Liab. and Stockholders’ Equity EXERCISE 2-3 b. Solution (cont.) Milea, Inc. Statement of Cash Flows For the Year Ended December 31, 2018 Cash Flow From Operating Activities Cash Received from Customers Cash Paid for Expenses Net Cash Flow from Operating Act. Cash Flow From Investing Activities Cash Flow From Financing Activities Issue of Stock Paid Dividends Net Cash Flow from Financing Act. Net Change in Cash Plus: Beginning Cash Balance Ending Cash Balance EXERCISE 2-8 (cont.) a. Pizza Express Inc. Effect of Events on Financial Statements for 2018 Assets = Liab. + Stockholders’ Equity Income Statement Statement of Event No. Cash + Supplies = Accts. Pay. + Com. Stock + Ret. Earn. Rev. ( Exp. = Net Income Cash Flows Beg. Bal 2,500 + -0- = -0- + 1,400 + 1,100 -0- ( -0- = -0- -0- 1. 2. 3. 4. Totals b. Explanation of Difference between Net Income and Cash Flow from Operating Activities: a. A cost that is an asset is: A cost that is an expense is: b. Examples of costs that are assets: 1. 2. 3. c. Examples of costs that are expenses: 1. . Explanation: a. g. b. h. c. i. d. j. e. k. f. l. PAGE 2-1