Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Malco Enterprises issued $10,000 of common stock when the company was started. In addition, Malco borrowed $36,000 from a local bank on July 1, Year

image text in transcribedimage text in transcribed
Malco Enterprises issued $10,000 of common stock when the company was started. In addition, Malco borrowed $36,000 from a local bank on July 1, Year 1. The note had a 6 percent annual interest rate and a one-year term to maturity. Malco Enterprises recognized $72,500 of revenue on account in Year 1 and $85,200 of revenue on account in Year 2. Cash collections of accounts receivable were $61,300 in Year 1 and $71,500 in Year 2. Malco paid $39,000 of other operating expenses in Year 1 and $45,000 of other operating expenses in Year 2. Malco repaid the loan and interest at the maturity date. Required a. Organize the information in accounts under an accounting equation. b. What amount of net cash flow from operating activities would be reported on the Year 1 cash flow statement? c. What amount of interest expense would be reported on the Year 1 income statement? d. What amount of total liabilities would be reported on the December 31, Year 1, balance sheet? e. What amount of retained earnings would be reported on the December 31, Year 1, balance sheet? f. What amount of cash flow from financing activities would be reported on the Year 1 statement of cash flows? g. What amount of interest expense would be reported on the Year 2 income statement? h. What amount of cash flows from operating activities would be reported on the Year 2 cash flow statement? i. What amount of assets would be reported on the December 31, Year 2, balance sheet? Complete this question by entering your answers in the tabs below. Reg A Req B to I Organize the information in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. Round intermediate calculations and your answers to nearest whole dollar amount. Not all cells will require entry.) MALCO ENTERPRISES Effect of Events on the Accounting Equation Year 1 and Year 2 Assets Liabilities Stockholders' Equity Event Cash Accounts Notes Interest Common Retained Receivable Payable Payable Stock Earnings Year 1 2. 3. 4. + + + + + + + 11 11 11 11 11 11 11 + + + + + + + + + + + + + + 5 End. Bal. Year 2 Beg.bal. + 2. + + + + + + + + + + + + + + + + + + + 3. 11 11 11 11 11 11 11 + 4 End. bal. +b. What amount of net cash flow from operating activities would be reported on the Year 1 cash flow statement? c. What amount of interest expense would be reported on the Year 1 income statement? d. What amount of total liabilities would be reported on the December 31, Year 1, balance sheet? e. What amount of retained earnings would be reported on the December 31, Year 1, balance sheet? f. What amount of cash flow from financing activities would be reported on the Year 1 statement of cash flows? g. What amount of interest expense would be reported on the Year 2 income statement? h. What amount of cash flows from operating activities would be reported on the Year 2 cash flow statement? i. What amount of assets would be reported on the December 31, Year 2, balance sheet? (For all requirements, enter cash outflows as negative amounts.) Show less A b. Net cash flow from operating activities C. Interest expense d. Total liabilities e. Retained earnings Cash flow from financing activities Interest expense h. Cash flows from operating activities i. Amount of assets

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting Information for Decision-Making and Strategy Execution

Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young

6th Edition

137024975, 978-0137024971

Students also viewed these Accounting questions

Question

4. Pupils often misbehave in order to make the teacher look bad.

Answered: 1 week ago