Simpson Company had the following balances in its accounting records as of December 31, Year 1: Assets

Question:

Simpson Company had the following balances in its accounting records as of December 31, Year 1:

Assets Liabilities and Equity
Cash ....................................................$ 40,000

Accounts Payable ................................$ 7,500
Accounts Receivable ..............................9,000

Common Stock ......................................45,000
Land ......................................................51,000

Retained Earnings ................................47,500
Total ..................................................$100,000

Total ..................................................$100,000

The following accounting events apply to Simpson Company’s Year 2 fiscal year:
Jan. 1 Acquired $20,000 cash from the issue of common stock.
Feb. 1 Paid $6,000 cash in advance for a one-year lease for office space.
Mar. 1 Paid a $2,000 cash dividend to the stockholders.
April. 1 Purchased additional land that cost $15,000 cash.
May 1 Made a cash payment on accounts payable of $5,500.
July 1 Received $9,600 cash in advance as a retainer for services to be performed monthly over the coming year.
Sept. 1 Sold land for $30,000 cash that had originally cost $30,000.
Oct. 1 Purchased $2,500 of supplies on account.
Dec. 31 Earned $58,000 of service revenue on account during the year.
31 Received cash collections from accounts receivable amounting to $46,000.
31 Incurred other operating expenses on account during the year that amounted to $28,000.
31 Recognized accrued salaries expense of $6,500.
31 Had $50 of supplies on hand at the end of the period.
31 The land purchased on April 1 had a market value of $20,000.

Required
Based on the preceding information, answer the following questions for Simpson Company. All questions pertain to the Year 2 financial statements.
a. What amount would Simpson report for land on the balance sheet?
b. What amount of net cash flow from operating activities would be reported on the statement of cash flows?
c. What amount of rent expense would be reported on the income statement?
d. What amount of total liabilities would be reported on the balance sheet?
e. What amount of supplies expense would be reported on the income statement?
f. What amount of unearned revenue would be reported on the balance sheet?
g. What amount of net cash flow from investing activities would be reported on the statement of cash flows?
h. What amount of total expenses would be reported on the income statement?
i. What amount of service revenue would be reported on the income statement?
j. What amount of cash flows from financing activities would be reported on the statement of cash flows?
k. What amount of net income would be reported on the income statement?
l. What amount of retained earnings would be reported on the balance sheet?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

Fantastic news! We've Found the answer you've been seeking!