The following information, in T-account format, is provided for the M & M Company for the year 2003:

Transcribed Image Text:

Cash Account Beg. Bal. 15,400 (b) 56,500 (a) 147,000 (c) 23,000 (d) 3,500 (f) 59,700 (e) 15,000 (g) 1,600 (h) 2,400 End. Bal. 37,700 Required: Additional information: 2. Sales revenue for the period was $145,000. Accounts receivable (net) decreased $2,000 during the period. b. Net purchases of $58,000 were made during 2003, all on account. Accounts payable in- creased $1,500 during the period. C. The equipment account increased by $18,000 during the year. d. One piece of equipment that cost $5,000, with a net book value of $3,000, was sold for a $500 gain. e. The company borrowed $15,000 from its bank during the year. f. Various operating expenses were all paid in cash, except for depreciation of $1,800. Total operating expenses were $61,500. g Interest expense for the year was $1,200. The interest payable account decreased by $400 during the year. h. Income tax expense for the year was $3,600. The income taxes payable account increased by $1,200 during the year. 1. From the information given, reconstruct the journal entries that must have been made during the year (omit explanations). 2. Prepare a statement of cash flows for M & M Company for the year ended December 31, 2003.