Sage Inc. experienced the following transactions for Year 1, its first year of operations: 1. Issued common stock for $100,000 cash. 2. Purchased $210,000 of merchandise on account. 3. Sold merchandise that cost $158,000 for $314,000 on account. 4. Collected $276,000 cash from accounts receivable. 5. Paid $190,000 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 6190 Over 90 days Amount $22,800 9,500 1,900 1,900 1,900 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? Req A Req B Inc Stmt Req B Stmt of Changes Req 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 Accounts Titles for Retained Earnings, leave the cell blank.) Assets SAGE INC. Accounting Equation for the Year 1 Liabilities Equity Merchandise Accounts Common Retained + Inventory Payable Stock Earnings + Event Accounts Titles for Retained Earnings Cash NRV Accounts Receivable + + + 1. + + + 2. + + = + + + + 3a. + + + 3b. + + + + + 4. + + + + 5. + = + ++ 6. + + + 7. + + 8. + + + = + +++ + + Bal. + Req A Req B Inc Stmt Req B Stmt of Changes Req B Bal Sheet Req B Stmt Cash Flows Reqc 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 Req 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 Bal Req A Req B Inc Stmt Reg B Stmt of Changes Sheet Req B Stmt Cash Flows Reqc Prepare the balance sheet for Sage Inc. for Year 1. (Be sure to list the assets in the order of their liquidity.) 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 Req B Inc Stmt Req B Bal Req A Req B Stmt of Changes Req B Stmt Cash Flows Sheet Reqc Prepare the statement of cash flows for Sage Inc. for Year 1. (Cash outflows should be indicated with a minus sign.) 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 Complete this question by entering your answers in the tabs below. Req A Req B Inc Stmt Req 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
