During 2005 Rustic Camp Sites experienced the following transactions.

1. RCS acquired \($32,000\) cash by issuing common stock.

2. RCS received \($116,000\) cash for providing services to customers (leasing camp sites).

3. RCS paid \($13,000\) cash for salaries expense.

4. RCS paid a \($9,000\) cash dividend to the owners.

5. RCS sold land that had cost \($100,000\) for \($100,000\) cash.

6. RCS paid \($47,000\) cash for other operating expenses.

Required:-

a.Record the transaction data in a horizontal financial statements model like the following one. In the Cash Flow column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The beginning balances have been recorded as an example. They are the ending balances shown on RCS’s December 31,2004, financial statements illustrated in the chapter. Note that the revenue and expense accounts have a zero beginning balance. Amounts in these accounts apply only to a single accounting period. Revenue and expense account balances are not carried forward from one accounting period to the next.

b. Explain why there are no beginning balances in the Income Statement columns.

c. What amount of net income will RCS report on the 2005 income statement?

d. What amount of total assets will RCS report on the December 31, 2005, balance sheet?

e. What amount of retained earnings will RCS report on the December 31, 2005, balance sheet?

f. What amount of net cash flow from operating activities will RCS report on the 2005 statement of cash flows?

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Balance Sheet Income Statement Assets = Liab. + Stockholders' Equity Statement of Event No. Cash + Land = N. Pay. + Com. Stk. + Ret. Earn. Rev. - Exp. = Net Inc. Cash Flows Beg, bal. 51,000+ 500,000 400,000 120,000 + 31,000 NA G - NA == NA NA