Question
The PomaPoma Company was incorporated on JuneJune ?1, 20X1. PomaPoma had 5050 holders of common stock. JasonJason PomaPoma?, who was the president and? CEO, held
The
PomaPoma
Company was incorporated on
JuneJune
?1, 20X1.
PomaPoma
had
5050
holders of common stock.
JasonJason
PomaPoma?,
who was the president and? CEO, held
55 %55%
of the shares. The company rented space in chain discount stores and specialized in selling running shoes.
Poma'sPoma's
first location was a store in
Oakbrook CenterOakbrook Center
Mall. The following events occurred during
JuneJune?:
LOADING...
?(Click the icon to view the? events.)Read the requirements
LOADING...
.Requirement 1. Prepare an analysis of
PomaPoma
?Company's transactions, employing the equation approach. Columns include one for Equipment and Fixtures and one for Note Payable. Enter the transactions into the equation one transaction at a? time, beginning with? "a". For each transaction effecting Retained? Earnings, select whether the item is a revenue? (R) or expense? (E). Enter transaction? "d" in two? parts: d.1. to record the sale and d.2. to record the cost of the inventory sold. After entering all of the? transactions, calculate the balance for each account in the equation at the end of
JuneJune.
?(Enter decreases with a minus sign or parentheses and leave any unused cells blank. Abbreviations? used: A/R? = Accounts? receivable; Merch? = Merchandise; Equip? = Equipment;? A/P = Accounts? payable; N/P? = Notes? payable.)
| Assets | = | Liabilities | + | Stockholders' Equity | ||||||||||||||
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| Merch |
| Prepaid |
| Equip and |
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| Paid-in |
| Retained | ||
|
| Cash | + | A/R | + | Inventory | + | Rent | + | Fixtures | = | A/P | + | N/P | + | Capital | + | Earnings | |
| a. |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
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|
| b. |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
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|
| c. |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
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|
| d.1. |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
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|
| d.2. |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
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|
| e. |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
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|
| f. |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
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| g. |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
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| h. |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
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|
| i. |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
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| j. |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
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| k. |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
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|
| l. |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
|
|
| Bal |
| + |
| + |
| + |
| + |
| = |
| + |
| + |
| + |
|
Requirement 2. Prepare a balance sheet as of
JuneJune
?30, 20X1, and an income statement for the month of
JuneJune.
Ignore income taxes.Begin by preparing the income statement for the month of
JuneJune.
| Poma Company | |||
| Income Statement | |||
| Month ending June 30, 20X1 | |||
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| Net income (loss) |
|
| |
Now prepare a balance sheet as of
JuneJune
?30, 20X1. Begin by preparing the assets? section, the complete the balance sheet by preparing the liabilities and? stockholders' equity section of the statement.
| Poma Company | |||
| Balance Sheet | |||
| June 30, 20X1 | |||
| Assets | |||
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| ||
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| ||
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| Total assets |
| ||
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| Liabilities and Stockholders' Equity | ||
| Liabilities | |||
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| |
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| |
| Stockholders' equity | |||
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| ||
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| |
|
| Total liabilities and stockholders' equity |
|
|
Requirement 3. Given these sparse? facts, analyze
Poma'sPoma's
performance for
JuneJune
and its financial position as of
JuneJune
?30, 20X1.Most businesses tend to have net
?
income
losses
during their? start-up phase, so
?
Poma's ability to show a net income for June is good.
Poma's net loss for the month of June is concerning.
Poma's net loss for the month of June is to be expected.
Many points can be? raised, including the problem of maintaining an? "optimum" cash balance so that creditors can be paid neither too quickly nor too? slowly, however,
Poma'sPoma's
financial position appears to be
?
strong
weak
as shown by its
?
cash balance in excess of total liabilities.
liabilities in excess of its stockholders' equity.
stockholders' equity in excess of its assets.
total liabilities in excess of its assets.
Choose from any list or enter any number in the input fields and then continue to the next question.
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Internal Auditing Assurance And Consulting Services
Authors: Kurt F. Reding, Paul J. Sobel, Urton L. Anderson, Michael J. Head, Sridhar Ramamoorti, Mark Salamasick, Contributing Writer, Cris Ridd, Richard Tuschman
1st Edition
0894136100, 978-0894136108
