Roger Williams started Electronics, Inc. on January 1, 2011. The company experienced the following events during its
Question:
Roger Williams started Electronics, Inc. on January 1, 2011. The company experienced the following events during its first year of operation.
1. Acquired \(\$ 15,000\) cash by issuing common stock.
2. Paid \(\$ 5,000\) cash to purchase land.
3. Received \(\$ 42,000\) cash for providing computer consulting services to customers.
4. Paid \(\$ 12,500\) cash for salary expense.
5. Acquired \(\$ 4,000\) cash from the issue of additional common stock.
6. Borrowed \(\$ 15,000\) cash from the bank.
7. Purchased additional land for \(\$ 15,000\) cash.
8. Paid \(\$ 16,000\) cash for other operating expenses.
9. Paid a \(\$ 2,500\) cash dividend to the stockholders.
10. Determined that the market value of the land is \(\$ 18,000\).
Required
a. Record these events in a horizontal statements model. Also, in the Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first event is shown as an example.
b. What is the net income earned in 2011 ?
c. What is the amount of total assets at the end of 2011 ?
d. What is the net cash flow from operating activities for 2011?
e. What is the net cash flow from investing activities for 2011?
f. What is the net cash flow from financing activities for 2011?
g. What is the cash balance at the end of 2011?
h. As of the end of the year 2011, what percentage of total assets were provided by creditors, investors, and earnings?
i. What is the balance in the Retained Earnings account immediately after Event 4 is recorded?
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