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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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