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3. Cash paid for land. 4. Cash paid for dividends.
EX 1-24 Statement of cash flows
OBJ. 5
A summary of cash flows for Ethos Consulting Group for the year ended May 31, 2014, is shown below.
Cash receipts: Cash received from customers
637,500 Cash received from issuing capital stock
62,500 Cash payments:
Cash paid for operating expenses 475,000
Cash paid for land 90,000
Cash paid for dividends 17,500
The cash balance as of June 1, 2013, was 58,000. Prepare a statement of cash flows for Ethos Consulting Group for the year ended May
31, 2014.
EX 1-25 Financial statements
OBJ. 5
We-Sell Realty, organized August 1, 2014, is owned and operated by Omar Farah. How many errors can you find in the following statements for We-Sell Realty, prepared after
its first month of operations?
We-Sell Realty Income Statement
August 31, 2014
Sales commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,000
Expenses: Office salaries expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87,000 Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18,000 Automobile expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,500 Miscellaneous expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,200 Supplies expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,150 total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
115,850 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25,000
Omar Farah Retained Earnings Statement
August 31, 2013
Retained earnings, August 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less dividends during August . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10,000 10,000
Additional issuance of capital stock on August 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . 15,000
5,000 Net income for August. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25,000 Retained earnings, August 31, 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30,000
Balance Sheet For the Month Ended August 31, 2014
Assets Liabilities
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,900
Accounts receivable . . . . . . . . . . . . . . . . . . . . . 38,600
Accounts payable . . . . . . . . . . . . . . . . . 22,350 Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,000
Stockholders’ Equity
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . 30,000
total assets . . . . . . . . . . . . . . . . . . . . . . . 31,250 total liabilities and stockholders’ equity . . .
72,600
Correct amount of total assets is
51,500.
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Chapter 1 Introduction to Accounting and Business
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