Question
In: Accounting
Sage Inc. experienced the following transactions for 2018, its first year of operations: Issued common stock...
Sage Inc. experienced the following transactions for 2018, its first year of operations:
- Issued common stock for $110,000 cash.
- Purchased $205,000 of merchandise on account.
- Sold merchandise that cost $164,000 for $326,000 on account.
- Collected $292,000 cash from accounts receivable.
- Paid $185,000 on accounts payable.
- Paid $54,000 of salaries expense for the year.
- Paid other operating expenses of $70,000.
- Sage adjusted the accounts using the following information from an accounts receivable aging schedule:
| Number of Days Past Due | Amount | Percent Likely to Be Uncollectible | Allowance Balance | ||
| Current | $ | 20,400 | 0.01 | ||
| 0–30 | 8,500 | 0.05 | |||
| 31–60 | 1,700 | 0.10 | |||
| 61–90 | 1,700 | 0.20 | |||
| Over 90 days | 1,700 | 0.50 | |||
a. Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank.)
| SAGE INC. | ||||||||||||||
| Accounting Equation for the Year 2018 | ||||||||||||||
| Event | Assets | = | Liabilities | + | Equity | Accounts Titles for Retained Earnings | ||||||||
| Cash | + | Accounts Receivable | – | Allowance | + | Merchandise Inventory | = | Accounts Payable | + | Common Stock | = | Retained Earnings | ||
| 1. | not attempted | + | not attempted | – | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted |
| 2. | not attempted | + | not attempted | – | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted |
| 3a. | not attempted | +not attempted | not attempted | –not attempted | not attempted | +not attempted | not attempted | =not attempted | not attempted | +not attempted | not attempted | =not attempted | not attempted | not attempted |
| 3b. | not attempted | +not attempted | not attempted | –not attempted | not attempted | +not attempted | not attempted | =not attempted | not attempted | +not attempted | not attempted | =not attempted | not attempted | not attempted |
| 4. | not attempted | + | not attempted | – | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted |
| 5. | not attempted | + | not attempted | – | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted |
| 6. | not attempted | + | not attempted | – | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted |
| 7. | not attempted | + | not attempted | – | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted |
| 8. | not attempted | + | not attempted | – | not attempted | + | not attempted | = | not attempted | + | not attempted | = | not attempted | not attempted |
| Bal. | 0 | + | 0 | – | 0 | + | 0 | = | 0 | + | 0 | = | 0 | |
-
Prepare the income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for Sage Inc. for 2018.
| SAGE INC. | ||
| Income Statement | ||
| For the Year Ended 2018 | ||
| not attempted | not attempted | |
| not attempted | not attempted | |
| not attempted | not attempted | |
| Operating expenses | ||
| not attempted | not attempted | |
| not attempted | not attempted | |
| not attempted | not attempted | |
| not attempted | not attempted | |
| Total operating expenses | 0 | |
| not attempted | ||
| SAGE INC. | ||
| Statement of Changes in Stockholders’ Equity | ||
| For the Year Ended 2018 | ||
| Beginning common stock | not attempted | |
| not attempted | not attempted | |
| Ending common stock | $0 | |
| Beginning retained earnings | not attempted | |
| not attempted | not attempted | |
| Ending retained earnings | 0 | |
| Total stockholders’ equity | $0 | |
Solutions
Expert Solution
Accounting Equation -
Accounting Equation is the relation of Assets with Stakeholder's Equity and Liabilities. Every Accounting transaction should balance the equation. Every transaction has double entry effect once in debit side of the financial statetement and another in credit side of the financial statement.
a. Accounting Equation in the question -
a.2 Sage adjusted the accounts using the following information from an accounts receivable aging schedule:
b. Income Statement -
c. Statement of Stockholder's Equity -
d. Balance Sheet -
ekkarill92 answered 2 years agoRelated Solutions
Sage Inc. experienced the following transactions for 2018, its first year of operations: Issued common stock...
Sage Inc. experienced the following transactions for 2018, its
first year of operations:
Issued common stock for $100,000 cash.
Purchased $200,000 of merchandise on account.
Sold merchandise that cost $154,000 for $306,000 on
account.
Collected $276,000 cash from accounts receivable.
Paid $180,000 on accounts payable.
Paid $48,000 of salaries expense for the year.
Paid other operating expenses of $64,000.
Sage adjusted the accounts using the following information from
an accounts receivable aging schedule:
Number of Days Past Due
Amount
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Sage Inc. experienced the following transactions for 2018, its first year of operations: Issued common stock...
Sage Inc. experienced the following transactions for 2018, its
first year of operations:
Issued common stock for $110,000 cash.
Purchased $205,000 of merchandise on account.
Sold merchandise that cost $164,000 for $326,000 on
account.
Collected $292,000 cash from accounts receivable.
Paid $185,000 on accounts payable.
Paid $54,000 of salaries expense for the year.
Paid other operating expenses of $70,000.
Sage adjusted the accounts using the following information from
an accounts receivable aging schedule:
Number of Days Past Due
Amount
Percent...
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Paid $180,000 on accounts payable.
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