3 eBook Print Sage Inc. experienced the following transactions for Year 1, its first year of operations: 1. Issued common stock for $120,000 cash. 2. Purchased $180,000 of merchandise on account. 3. Sold merchandise that cost $164,000 for $326,000 on account. 4. Collected $292,000 cash from accounts receivable. 5. Paid $160,000 on accounts payable. 6. Paid $60,000 of salaries expense for the year. 7. Paid other operating expenses of $76,000. 8. Sage adjusted the accounts using the following information from an accounts receivable aging schedule: Number of Days Percent Likely to Be Past Due Current Amount $20,400 Uncollectible Allowance Balance 0.01 0-30 8,500 0.05 31-60 1,700 0.10 61-90 1,700 0.20 Over 90 days 1,700 0.50 Required a. Organize the transaction data in accounts under an accounting equation. b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Sage Inc. for Year 1. c. What is the net realizable value of the accounts receivable at December 31, Year 1? Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Req A Req B Inc Req B Stmt of Stmt Changes Req B Bal Sheet Req B Stmt Cash Flows Req C Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank.) SAGE INC. Accounting Equation for the Year 1 Assets = Liabilities + Equity Accounts Titles Event Cash + NRV Accounts Merchandise Accounts Receivable Inventory Payable + Common Stock + Retained Earnings for Retained Earnings 1. 2. + + . + 3b. + 4. 5. 6. + 7. + 8. Bal. 0+ 0+ 0 = 0 + 0+ 0 < Req A Req B Inc Stmt > Complete this question by entering your answers in the tabs below. Req A Req B Inc Stmt Req B Stmt of Changes Req B Bal Sheet Req B Stmt Cash Flows Req C Prepare the income statement for Sage Inc. for Year 1. SAGE INC. Income Statement For the Year Ended Year 1 Sales revenue Cost of goods sold Gross margin Operating expenses Salaries expense Other operating expenses Uncollectible accounts expense Total operating expenses Net income < Req A 0 Req B Stmt of Changes > Complete this question by entering your answers in the tabs below. Req A Req B Inc Stmt Req B Stmt of Changes Req B Bal Sheet Req B Stmt Cash Flows Req C Prepare the statement of changes in stockholders' equity for Sage Inc. for Year 1. SAGE INC. Statement of Changes in Stockholders' Equity For the Year Ended Year 1 Beginning common stock Plus: Stock issued Ending common stock Beginning retained earnings Plus: Net income Ending retained earnings $ 0 Total stockholders' equity 0 $ 0 < Req B Inc Stmt Req B Bal Sheet > Req A Req B Inc Stmt Req B Stmt of Changes Req B Bal Sheet Req B Stmt Cash Flows Req C Prepare the balance sheet for Sage Inc. for Year 1. (Be sure to list the assets in the order of their liquidity.) SAGE INC. Assets Cash Balance Sheet As of the End of the Year 1 Accounts receivable Less: Allowance for doubtful accounts Merchandise inventory Total assets Liabilities Accounts payable Total liabilities Stockholders' equity Common stock Retained earnings 0 $ 0 0 Total stockholders' equity 0 Total liabilities and stockholders' equity $ 0 < Reg B Stmt of Changes Req B Stmt Cash Flows > Req A Req B Inc Stmt Req B Stmt of Changes Req B Bal Sheet Req B Stmt Cash Flows Req C Prepare the statement of cash flows for Sage Inc. for Year 1. (Cash outflows should be indicated with a minus sign.) SAGE INC. Statement of Cash Flows For the Year Ended Year 1 Cash flows from operating activities: Inflow from customers Outflow for inventory Outflow for expenses Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Cash inflow from stock issued Net cash flows from financing activities Net change in cash Plus: Beginning cash balance Ending cash balance $ 0 0 0 $ 0 < Req B Bal Sheet Req C > Current 0-30 $20,400 0.01 8,500 0.05 31-60 1,700 0.10 61-90 1,700 0.20 Over 90 days 1,700 0.50 Required Saved a. Organize the transaction data in accounts under an accounting equation. b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Sage Inc. for Year 1. c. What is the net realizable value of the accounts receivable at December 31, Year 1? Complete this question by entering your answers in the tabs below. Req A Req B Inc Stmt Req B Stmt of Req B Bal Changes Sheet Req B Stmt Cash Flows Req C What is the net realizable value of the accounts receivable at December 31, Year 1? Net realizable value < Req B Stmt Cash Flows Req C >