Question
To complete Requirement b , use formulas where normal arithmetic calculations are made within the financial statements (in particular the statement of changes in stockholders
- To complete Requirement b, use formulas where normal arithmetic calculations are made within the financial statements (in particular the statement of changes in stockholders equity).
The following accounts and balances were drawn from the records of Shearer Company at December 31, Year 2:
Cash | $22,100 | Accounts receivable | $21,000 |
Land | 43,000 | Cash flow from operating act. | 8,600 |
Insurance expense | 2,500 | Beginning retained earnings | 47,200 |
Dividends | 5,000 | Beginning common stock | 5,500 |
Prepaid insurance | 3,500 | Service revenue | 86,000 |
Accounts payable | 15,000 | Cash flow from financing act. | 9,000 |
Supplies | 2,100 | Ending common stock | 14,500 |
Supplies expense | 1,000 | Cash flow from investing act. | (6,000) |
Rent expense | 3,500 | Other operating expenses | 59,000 |
B.) It is interesting to speculate about what would happen if certain operating results change for better or worse. After completing Requirement a, change certain account balances for each of the following independent operating adjustments. After each adjustment, notice how the financial statements would differ if the change in operations were to occur. After noting the effect of each adjustment, return the data to the original amounts in Problem 2-41A and then go to the next operating adjustment. At the end, return all numbers to the original balances noted above.
Input the following table into the bottom of your excel worksheet, calculate the new amounts on the financial statements for the various operating changes listed:
Original | 1 | 2 | 3 | 4 | 5 |
Net income | |||||
Total assets | |||||
Total liabilities | |||||
Total stockholders equity | |||||
Total liabilities & stockholders equity |
Independent Operating Adjustments
- Revenue and the related Accounts Receivable increased $10,000.
- Revenue and the related Accounts Receivable decreased $10,000.
- Operating Expenses and the related Accounts Payable decreased $400.
- Operating Expenses and the related Accounts Payable increased $400.
- Dividends paid decreased $500 and cash changed accordingly.
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