first transaction is completed for you as an example. 1. Unlimited Fun received $65,000 cash from Rachel, the owner, and issued common stock. Income Statement Stmt. of Cash Flows Balance Sheet Assets Liabilities Acct. Acct. Salaries + Receiv Supplies - Equip. Pay. + Pay. Stockholders' Equity Common Retained Stock + Earnings 65,000 Net Income Revenue Expenses = = Cash 65,000 Cash Flow 65,000 FA 2 Unlimited Fun purchased a $1,900 computer. Unlimited Fun paid $900 in cash and received an invoice for the remaining balance. (Hint: This transaction impacts three accounts.) # Stmt. of Cash Flows Income Statement Balance Sheet Assets Liabilities Acct. Acct. Salaries Receiv. + Supplies - Equip. Pay. + Pay. Stockholders' Equity Common Retained Stock + Earnings Net Income Cash Revenue Expenses = Cash Flow 3. Unlimited Fun purchased receipt paper and pens totaling $200 and charged the purchase on account from Office Oracle. Income Statement Stmt. of Cash Flows Balance Sheet Assets = Liabilities Acct. Acct. Salaries Receiv. + Supplies - Equip. Pay. + Pay. Stockholders' Equity Common Retained Stock + Earnings Cash Net Revenue Expenses -Income Cash Flow 2 4. Unlimited Fun paid Office Oracle for the purchase in transaction #3. Stmt. of Cash Flows Income Statement Balance Sheet Assets Liabilities Acct. Acct Salaries Receiv. Supplies - Equip. Pay. + Pay. Stockholders' Equity Common Retained Stock + Earnings Cash Revenue Net Expenses = Income Cash Flow 5. Unlimited Fun hired Lindsey as a store manager. She will earn $20 per hour and starts work next week. Income Statement Stmt. of Cash Flows Balance Sheet Assets Liabilities Acct. Acct. Salaries + Receiv. + Supplies - Equip. Pay. + Pay. Stockholders' Equity Common Retained Stock Earnings Cash Net Revenue Expenses -Income Cash Flow 6. Lindsey worked 40 hours and will be paid at the end of the month. (Ignore payroll taxes) Stmt. of Cash Flows Income Statement Balance Sheet Assets = Liabilities Acct Acct. Salaries + Receiv. + Supplies + Equip. Pay. + Pay. Stockholders' Equity Common Retained Stock + Earnings Net Income Cash Revenue Expenses = Cash Flow 7. Unlimited Fun paid Lindsey for the hours she worked in transaction #6. Stmt. of Cash Flows Income Statement Balance Sheet Assets Liabilities Acct. Acct. Salaries Receiv Supplies - Equip. Pay.+! Pay. Stockholders' Equity Common Retained Stock + Earnings Net Income Cash + Revenue Expenses = Cash Flow 8. Unlimited Fun agrees to host a birthday party for Sally Smith next week. Stmt. of Cash Flows Income Statement Balance Sheet Assets Liabilities Acct. Acct. Salaries Receiv Supplies - Equip. = Pay. + Pay. Stockholders' Equity Common Retained Stock + Earnings Net Revenue Expenses -Income Cash + Cash Flow 9. Unlimited Fun hosted Sally's birthday party described in transaction #8 and received $400 cash. Stmt. of Cash Flows Income Statement Balance Sheet Assets Liabilities Acct. Acct. Salaries Receiv. + Supplies - Equip. Pay. + Pay. Stockholders' Equity Common Retained Stock + Earnings Net Revenue Expenses = Income Cash + Cash Flow 4 10. Unlimited Fun received and paid the $290 electric bill. $. Stmt. of Cash Flows Income Statement Balance Sheet Assets Liabilities Acct. Acct. Salaries Receiv Supplies - Equip. = Pay. + Pay. Stockholders' Equity Common Retained Stock + Earnings Net Expenses -Income Cash + Revenue Cash Flow 11. Unlimited Fun hosted a family day for a local company and billed the customer $2,500. Stmt. of Cash Flows Income Statement Balance Sheet Assets Liabilities Acct. Acct. Salaries Receiv Supplies - Equip. = Pay. + Pay. Common Stockholders' Equity Retained Stock + Earnings Net Expenses -Income Cash + Revenue Cash Flow 12. Unlimited Fun collected $2,000 from the customer in transaction #11. Stmt. of Cash Flows Income Statement Balance Sheet Assets Liabilities Acct. Acct. Salaries Recelv. Supplies + Equip. Pay. + Pay. Stockholders' Equity Common Retained Stock + Earnings Cash Net Revenue Expenses Income + Cash Flow 13. Unlimited Fun paid a $1,000 dividend to Rachel, the owner. Stmt. of Cash Flows Income Statement Assets Balance Sheet Liabilities Acct. Salaries Equip. Pay. + Pay. Acct. Receiv. Stockholders' Equity Common Retained Stock + Earnings Net Income Cash Supplies Revenue Expenses = Cash Flow Use the following table to summarize the transactions recorded above. The totals will be used to create financial statements in Part 3. Income Statement Stmt. of Cash Flows Balance Sheet Assets Liabilities Salaries Acct. Supplies - Equip. Acct. + Pay. Receiv Pay. Stockholders' Equity Retaine Commo n Stock Earnings 65,000 Expense Net Incom e Revenue S Cash 1 65,000 2 Cash Flow 65,000 FA 3 4 5 6 7 8 9 10) 11 12 13 als OA= IA= FA= 6 Part 3: Create Financial Statements Calculate and fill in the correct amounts for all gray highlighted cells in the January 2021 financial statements of Unlimited Fun. Use your knowledge of the financial statement relationships to verify the accuracy of your statements upon completion. Hint: Your balance sheet should total $66,810. Unlimited Fun Income Statement For the Month Ended January 31, 2021 Revenue Unlimited Fun Balance Sheet As of January 31, 2021 Assets Cash Accounts receivable Supplies Equipment Total Assets Expenses: Salaries expense Utilities expense Total expenses Net Income Liabilities and Stockholders' Equity Liabilities: Accounts payable Salaries payable Total liabilities Unlimited Fun Statement of Stockholders' Equity For the Month Ended January 31, 2021 Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $0 Beginning common stock Common stock issued Ending common stock $0 Beginning retained earnings Net income Dividends Ending retained earnings Total stockholders' equity Unlimited Fun Statement of Cash Flows For the Month Ended January 31, 2021 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net increase in cash Cash balance on January 1, 2021 Cash balance on January 31, 2021 7
