\begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{ Balance Sheet- As of December 31, 2018} \\ \hline Assets: Cash & $ & \\ \hline Accounts Receivable & & \\ \hline Prepaid Rent & & \\ \hline Equipment & & \\ \hline Less: Accumulated Dep. & & \\ \hline TOTAL Assets & & \\ \hline Liabilities: Accrued Wages & & \\ \hline Unearned Revenues & & \\ \hline TOTAL Liabilities & & \\ \hline Equity: Common Stock & & \\ \hline Retained Earnings & & \\ \hline Total Stockholders' Equity & & \\ \hline TOTAL Liabilities and Equity & & \\ \hline \end{tabular} \begin{tabular}{|l|l|c|} \cline { 1 - 2 } Statement of Cash Flows & \multicolumn{2}{|c|}{ Year ended December 31, 2018 } \\ \hline Operating Activities: & Cash receipts from customers & 1 \\ \hline & Cash payments for expenses & $ \\ \hline & Net Cash Flow- Operating & 1 \\ \hline Investing Activities: & Net Cash Flow-Investing- Purchase Equipment & 0 \\ \hline Financing Activities: & Net Cash Flow- Financing & $ \\ \hline & Net Increase in Cash & 0 \\ \hline & Beginning Cash Balance & $ \\ \hline & Ending Cash Balance & 3 \\ \hline \end{tabular} Next, prepare an Income Statement for the year ended December 31, 2018 Now, prepare the Statement of Changes in Stockholders' Equity, Balance Sheet and Statement of Cash Flows assuming 2018 was the first year of operations for the company: Instructions: Record the impact of the following transactions on the Basic Accounting Equation and Cash Flows for a company that began operations on 1/1/2018. 1) Provided services and received cash- $3,000. 2) Paid $450 in advance to rent a storage space for 6 months. 3) Performed $2,500 of services on account. 4) Accrued $800 of wages to be paid later. 5) Received $1,200 in advance for a 1 year service revenue contract. 6) Used cash to purchase Equipment - Cost; $2,000, Salvage Value; $200; Useful Life; 6 years. 7) Adjust the records to record the expiration of 4 months of rent on the storage space (Step #2). 8) Earned 2 months of the service contract (Step #5). Record the adjusting entry. 9) Adjust the records to record 4 months of depreciation on the Equipment. 10) Collected $1,700 from customers on account. Unearned Revenue 1) 9/1 - Received a $600 cash advance for a 6 month revenue contract. 2) 9/30- Earned 1 month of the revenue contract. ( $600/6=$100 month) Other Adjusting Entries- Depreciation Straight-Line Depreciation Formula= Cost-Salvage Value / Useful life 1) 8/1- Used cash to purchase an Auto to be used in the business- Cost: $800, Salvage Value $200, Useful Life: 5 years. 2) 12/31 - Record adjustment for depreciation (Aug-Dec). ( $800200=$600/5=120 per year /12=$10 per month x5 months =$50) Deferral Entries - Recorded AFTER cash is exchanged Purchase and adjust Supplies 1) 8/1- Used cash to purchase $300 of Supplies. 2) 8/31- Counted $225 supplies remaining. ( 300225=75 used) Purchase and adjust insurance 1) 1/1- Pay $2,400 to purchase a 1 year insurance policy. 2) 1/31- Record adjustment to reflect the expiration of 1 month of the insurance policy. ($2,400/12=$200 month) CH 2 Instructions: Review the following example adjusting entries. Each example is independent. Then, complete the exercise that follows. Accrual Entries - Recorded BEFORE cash is exchanged Sales on Account 1) 11/15- Provided services to customers for $2,000 on account. 2) 12/20- Collected $1,800 from customers who owe on account. Accrued Wages 1) 12/31- Accrued $3,000 of wages to be paid on 1/1. 2) 1/1- Paid Wages. \begin{tabular}{|l|c|c|} \hline \multicolumn{3}{|c|}{ Balance Sheet- As of December 31, 2018} \\ \hline Assets: Cash & $ & \\ \hline Land & & \\ \hline TOTAL Assets & & \\ \hline Liabilities: Notes Payable & & \\ \hline Equity: Common Stock & & \\ \hline Retained Earnings & & \\ \hline Total Stockholders' Equity & & \\ \hline TOTAL Liabilities and Equity & & \\ \hline \end{tabular} Next, prepare an Income Statement for the period: Now, prepare the Statement of Changes in Stockholders' Equity, Balance Sheet and Statement of Cash Flows assuming 2018 was the first year of operations for the company (Fill in non-shaded areas. Use the middle column for details and the right most column for totals): ACG2021-Principles of Financial Accounting Ch 1&2 Exercise Version 5-1 CH 1: Instructions: Record the impact of the following transactions on the Basic Accounting Equation and Cash Flows for a company that began operations on 1/1/2018. Also, categorize the entry as in the Type field: TYPE COLUMN: Asset Source (S)- Increase Assets and increase claims on Assets (i.e. Liabilities or Equity) Asset Exchange (E)- Increase Assets and decrease other Assets Asset Use (U)- Decrease Assets and decrease claims on Assets (i.e. Liabilities or Equity)