Working backward to cash receipts and disbursements. Exhibit 3.15 presents the comparative balance sheet of The Secunda Company as of the beginning and end of Year 2. Exhibit 3.16 presents the income statement for Year 2. The company makes all sales on account and purchases all goods and services on account. The Other Operating Expenses account includes depreciation charges and expirations of prepayments. The company debits dividends declared during the year to Retained Earnings.
Prepare a schedule showing all cash transactions for Year 2. (Hint: Using the transactions spreadsheet template available with this book, set up accounts for each of the accounts in the balance sheet and enter the amounts shown as of January 1. Year 2, and December 31. Year 2.
Starting with the revenue and expense accounts, reconstruct the transactions that took place during the year, and enter the amounts in the appropriate columns and rows of the spreadsheet. The Retained Earnings account in the balance sheet on December 31. Year 2. reflects the effects o\
earnings and dividends activities during Year 2. )