Sage Inc. experienced the following transactions for Year 1, its first year of operations: 1. Issued common stock for $80,000 cash. 2. Purchased $195,000 of merchandise on account. 3. Sold merchandise that cost $158,000 for $314,000 on account. 4. Collected $274,000 cash from accounts receivable. 5. Paid $175,000 on accounts payable. 6. Paid $60,000 of salaries expense for the year. 7. Paid other operating expenses of $76,000. 8. Sage adjusted the accounts using the following information from an accounts receivable aging schedule: Allowance Balance Number of Days Past Due Current 0-30 31-60 61-90 Over 90 days Amount $24,000 10,000 2,000 2,000 2,000 Percent Likely to Be Uncollectible 0.01 0.05 0.10 0.20 0.50 Required a. Organize the transaction data in accounts under an accounting equation. b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Sage Inc. for Year 1. c. What is the net realizable value of the accounts receivable at December 31, Year 1? Complete this question by entering your answers in the tabs below. Reg A Reg B Inc Stmt Req B Stmt of Changes Reg B Bal Sheet Req B Stmt Cash Flows Reg C 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 1 Liabilities Equity Merchandise Accounts Common Retained Inventory Payable Stock Earnings + Assets NRV Accounts Receivable Event Accounts Titles for Retained Earnings Cash + II + + 1. + + + 2. + + + 3a. + + + + 3b. + + + + + + + 4. + + + 5. + = + 6. + + + + + + + + + + + + 7. + + + 8. + + + + + +++ + Bal. + + + Complete this question by entering your answers in the tabs below. Req A Req B Inc Stmt Req B Stmt of Changes Reg B Bal Sheet Req B Stmt Cash Flows Reg C Prepare the income statement for Sage Inc. for Year 1. SAGE INC. Income Statement For the Year Ended Year 1 Operating expenses Total operating expenses Complete this question by entering your answers in the tabs below. Req A Req B Inc Stmt Reg B Stmt of Changes Req B Bal Sheet Req B Stmt Cash Flows Reqc Prepare the statement of changes in stockholders' equity for Sage Inc. for Year 1. SAGE INC. Statement of Changes in Stockholders' Equity For the Year Ended Year 1 Beginning common stock Ending common stock Beginning retained earnings Ending retained earnings Total stockholders' equity Req B Inc Req A Req B Stmt of Changes Reg B Bal Sheet Req B Stmt Cash Flows Reqc Stmt Prepare the balance sheet for Sage Inc. for Year 1. (Be sure to list the assets in the order of their liquidit SAGE INC. Balance Sheet As of the End of the Year 1 Assets Total assets Liabilities Total liabilities Stockholders' equity Total stockholders' equity Total liabilities and stockholders' equity Reg A Reg B Inc Stmt Req B Stmt of Changes Req B Bal Sheet Req B Stmt Cash Flows Reg C Prepare the statement of cash flows for Sage Inc. for Year 1. (Cash outflows should be SAGE INC. Statement of Cash Flows For the Year Ended Year 1 Cash flows from operating activities: Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net cash flows from financing activities Net change in cash Ending cash balance Req A Req B Inc Stmt Reg B Stmt of Changes Req B Bal Sheet Req B Stmt Cash Flows Reqc What is the net realizable value of the accounts receivable at December 31, Year 1? Net realizable value
