Question

Maben Company was started on January 1, Year 1, and experienced the following events during its first year of operation:

1. Acquired $34,000 cash from the issue of common stock.

2. Borrowed $36,000 cash from National Bank.

3. Earned cash revenues of $52,000 for performing services.

4. Paid cash expenses of $47,000.

5. Paid a $1,400 cash dividend to the stockholders.

6. Acquired an additional $24,000 cash from the issue of common stock.

7. Paid $9,000 cash to reduce the principal balance of the bank note.

8. Paid $57,000 cash to purchase land.

9. Determined that the market value of the land is $80,000.

A) Record the preceding transactions in the horizontal statements model. Also, in the Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), financing activities (FA), or net change in cash (NC). If the element is not affected by the event, leave the cell blank. The first event is shown as an example. (Enter any decreases to account balances and cash outflows with a minus sign. Not all cells will require entry.)

B) Determine the amount of total assets that Maben would report on the December 31, Year 1, balance sheet

C) Identify the asset source transactions and related amounts for Year 1.

D) Determine the net income that Maben would report on the Year 1 income statement.

E ) Determine the net cash flows from operating activities, investing activities, and financing activities that Maben would report on the Year 1 statement of cash flows. (Enter cash outflows as negative amounts.)

F) Determine the percentage of assets that were provided by investors, creditors, and earnings. (Round your answers to 2 decimal places.)

G) What is the balance in the Retained Earnings account immediately after Event 3 is recorded?

Answer 1

	Balance Sheet					Income statement
	Assets		liabilities	Stockholders Equity
Event no	Cash	land	Notes payable	CS	R.E	Revenue	Expense	Net income	Statement of cash flow
1	34,000			34,000					34,000	FA
2	36,000		36,000						36,000	FA
3	52,000				52,000	52,000		52,000	52,000	OA
4	-47,000				-47,000		47,000	-47,000	-47,000	OA
5	-1,400				-1,400				-1,400	FA
6	24,000			24,000					24,000	FA
7	-9000		-9000						-9000	FA
8	-57,000	55,000							-57,000	IA
9										NA
Total	31,600	55000	27000	58,000	3600	52000	47000	5000	31,600	NC
b	Total Assets		86,600
c.	Sources of Assets
	Event		Amount
	Issue of Stock		34000
	Cash from loan		36,000
	Cash from revenue		52,000
	Issue of Stock		24,000
	total source of asset		146000
d-1	Net income		5000
d-2	no
e.	Net cash flows from operating activities				5000
	net cash flow from investing activities				-57,000
	net cash flow from financing activities				83,600
f)	percentage of assets
	provided by investors (common stockholders)					66.97%
	provided by creditors(notes payable)					31.18%
	provided by earnings					4.16%
g)	52,000