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Sage Inc. experienced the following transactions for 2018, its first year of operations: Issued common stock for $110,000 cash. Purchased $205,000 of merchandise on account.
Sage Inc. experienced the following transactions for 2018, its first year of operations:
- Issued common stock for $110,000 cash.
- Purchased $205,000 of merchandise on account.
- Sold merchandise that cost $164,000 for $326,000 on account.
- Collected $292,000 cash from accounts receivable.
- Paid $185,000 on accounts payable.
- Paid $54,000 of salaries expense for the year.
- Paid other operating expenses of $70,000.
- Sage adjusted the accounts using the following information from an accounts receivable aging schedule:
Number of Days Past Due | Amount | Percent Likely to Be Uncollectible | Allowance Balance | ||
Current | $ | 20,400 | 0.01 | ||
030 | 8,500 | 0.05 | |||
3160 | 1,700 | 0.10 | |||
6190 | 1,700 | 0.20 | |||
Over 90 days | 1,700 | 0.50 |
a. 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 2018 | ||||||||||||||
Event | Assets | = | Liabilities | + | Equity | Accounts Titles for Retained Earnings | ||||||||
Cash | + | Accounts Receivable | Allowance | + | Merchandise Inventory | = | Accounts Payable | + | Common Stock | = | Retained Earnings | |||
1. | not attempted | + | not attempted | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted | |
2. | not attempted | + | not attempted | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted | |
3a. | not attempted | +not attempted | not attempted | not attempted | not attempted | +not attempted | not attempted | =not attempted | not attempted | +not attempted | not attempted | =not attempted | not attempted | not attempted |
3b. | not attempted | +not attempted | not attempted | not attempted | not attempted | +not attempted | not attempted | =not attempted | not attempted | +not attempted | not attempted | =not attempted | not attempted | not attempted |
4. | not attempted | + | not attempted | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted | |
5. | not attempted | + | not attempted | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted | |
6. | not attempted | + | not attempted | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted | |
7. | not attempted | + | not attempted | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted | |
8. | not attempted | + | not attempted | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted | |
Bal. | 0 | + | 0 | 0 | + | 0 | = | 0 | + | 0 | = | 0 |
-
Prepare the income statement, statement of changes in stockholders equity, balance sheet, and statement of cash flows for Sage Inc. for 2018.
SAGE INC. | ||
Income Statement | ||
For the Year Ended 2018 | ||
not attempted | not attempted | |
not attempted | not attempted | |
not attempted | not attempted | |
Operating expenses | ||
not attempted | not attempted | |
not attempted | not attempted | |
not attempted | not attempted | |
not attempted | not attempted | |
Total operating expenses | 0 | |
not attempted |
SAGE INC. | ||
Statement of Changes in Stockholders Equity | ||
For the Year Ended 2018 | ||
Beginning common stock | not attempted | |
not attempted | not attempted | |
Ending common stock | $0 | |
Beginning retained earnings | not attempted | |
not attempted | not attempted | |
Ending retained earnings | 0 | |
Total stockholders equity | $0 |
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