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Required information [The following information applies to the questions displayed below.] Green Brands, Inc. (GBI) presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from GBI's Year 2 and Year 1 year-end balance sheets: Account Title Accounts receivable Merchandise inventory Prepaid insurance Accounts payable Salaries payable Unearned service revenue Year 2 $ 23,000 56,100 18,900 24,000 4,600 700 Year 1 $ 29,500 51,100 25,900 17,700 3,950 2,950 The Year 2 income statement is shown next: Income Statement Sales Cost of goods sold Gross margin Service revenue Insurance expense Salaries expense Depreciation expense Operating income Gain on sale of equipment Net income $ 608,000 (378,000) 230,000 5,000 (38,000) (144,000) (5,700) 47,300 3,000 $ 50,300 b. Prepare the operating activities section of the statement of cash flows using the indirect method for Year 2. (Amounts to be deducted should be indicated When Crossett Corporation was organized in January Year 1, it immediately issued 4,800 shares of $48 par, 8 percent, cumulative preferred stock and 9,000 shares of $12 par common stock. Its earnings history is as follows: Year 1, net loss of $15,600; Year 2, net income of $61,400; Year 3, net income of $101,300. The corporation did not pay a dividend in Year 1. Required a. How much is the dividend arrearage as of January 1, Year 2? Dividend arrearage $ 13,824 b. Assume that the board of directors declares a $53,864 cash dividend at the end of Year 2 (remember that the Year 1 and Year 2 preferred dividends are due). How will the dividend be divided between the preferred and common stockholders? (Amounts to be deducted should be indicated with minus sign.) Distributed to Shareholders Preferred Common Amount Total dividend declared Year 1 Arrearage Year 2 Preferred dividends Available for common Distributed to common Total distribution $ 0 $ 0 Newly formed S&J Iron Corporation has 138,000 shares of $6 par common stock authorized. On March 1, Year 1, S&J Iron issued 12,000 shares of the stock for $11 per share. On May 2, the company issued an additional 21,000 shares for $20 per share. S&J Iron was not affected by other events during Year 1. Required a. Record the transactions in a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element was not affected by the event. Assets = Balance Sheet Liabilities Stockholders' Equity Common PIC in Stock Excess Event Cash + March 1 + + May 2 + + b. Determine the amount S&J Iron would report for common stock on the December 31, Year 1, balance sheet. c. Determine the amount S&J Iron would report for paid-in capital in excess of par. d. What is the total amount of capital contributed by the owners? e. What amount of total assets would S&J Iron report on the December 31, Year 1, balance sheet? b. Common stock Paid-in capital in excess of par Total paid-in capital Total assets f. Prepare journal entries to record the March 1 and May 2 transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the issue of common stock
