Dakota Company experienced the following events during Year 2: 1. Acquired $20,000 cash from the issue of common stock, 2. Pald $15,000 cash to purchase land. 3. Borrowed $5,000 cash. 4. Provided services for $40,000 cash. 5. Paid $1.000 cash for utilities expense. 6. Poid $30,000 cash for other operating expenses. 7. Pald a $2,000 cash dividend to the stockholders. 8. Determined that the market value of the land purchased in Event 2 is now $17,500 Required a. The January 1, Year 2, account balances are shown in the following accounting equation Record the eight events in the appropriate accounts under an accounting equation Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example, b-1. Prepare an income statement for the Year 2 accounting period. b-2. Prepare a statement of changes in equity for the Year 2 accounting period, b-3. Prepare a year-end balance sheet for the Year 2 accounting period, b-4. Prepare a statement of cash flows for the Year 2 accounting period, c-1. Determine the percentage of assets that were provided by retained earnings. c-2. Does the retained earning balance reflect the amount of cash that the company has available to pay dividends? d. Based on the December 31, Year 2, balance sheet, what is the largest cash dividend Dakota could pay? Return to question 1 Complete this question by entering your answers in the tabs below. RA Re: Reg 2 Reg 3 Reg 84 Reg Cand D The January 1, Year 2, account balances are shown in the following accounting equation. Record the eight events in the appropriate accounts under an accounting equation Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example (Enter any decreases to account balances with a minus sign. Not all cells require input.) Shows Assets Cash . . 15.000 1/1/2 2 5 $5,000 - 10.000 20.000 (15,000) 5.000 40.000 (1.000) (30.000) (2.000) DAKOTA COMPANY Accounting Equation for Your 2 Liabilities Stockholders' Equity Account Tities for Retained Notes Common Retained Earning Payable Stock Earnings 5.000 5.000 15.000 + 20.000 . 0 0. 0 6.000 0. o 0 O. 40.000 Service revenue 0. 01. (1.000) 0. 0. (30,000) Operating expense 0. 0. 12.000 Dividende O. . 10,000 25,000 22.000 4 5 00 - 000 6 o T + 0 Totais 27,000 30.000 Reg 0 > c-2. Does the retained earning balance reflect the amount of cash that the company has available to pay dividends? d. Based on the December 31, Year 2, balance sheet, what is the largest cash dividend Dakota could pay? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg A Reg B1 Reg B2 Reg B3 Reg 14 Reg C and D Prepare an income statement for the Year 2 accounting period. DAKOTA COMPANY Income Statement For the Year Ended December 31, Year 2 Service revenue S 40,000 Uites expenso 1,000 Operating expense 30,000 Not income S 9,000 c-2. Does the retained earning balance reflect the amount of cash that the company has available to pay dividends? d. Based on the December 31, Year 2, balance sheet, what is the largest cash dividend Dakota could pay? Answer is not complete. Complete this question by entering your answers in the tabs below. Req Reg 1 Req B2 Req B3 Reg B4 Reg C and D Prepare a statement of changes in equity for the Year 2 accounting period. DAKOTA COMPANY Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 Beginning common stock 5,000 Plus: Common stock issued 20,000 Ending common stock 25,000 Beginning retained varnings 15.000 Plus: Not income 9,000 Loss Dividends 2,000 Ending retained earnings 22.000 Total stockholders equity $ 47.000 $ : WHY SHE WHIC EUR. Reg A Reg B1 Reg B2 Req B3 Req B4 Reg C and D Prepare a year-end balance sheet for the Year 2 accounting period DAKOTA COMPANY Balance Sheet As of December 31, Year 2 Assets Land $ 20.000 Cash 10,000 S 30,000 * $ 0 Total assets Liabilities Notes payable Operating expense Total abilities Stockholders' Equity Common stock Dividends Accounts receivable Total stockholders' equity Total liabilities and stockholders' equity 0 D
