Question

Below are listed the balances for JET Ltd. at the end of the year, December 31, 2017. The accounts and activities are listed in random order. This is the company’s first year of operations.

Account/Activity Name	Amount	Element/Activity	Financial Statement
Service revenue	22,300
Telephone expense	2,650
Business licence	60
Income tax expense	1,260
Cash receipts from customers	38,200
Office supplies	440
Cash payments to suppliers	30,723
Office supplies expense	560
Website expenses	2,780
Cash, end of year (must be calculated)	?
Accounts payable	582
Advertising expense	2,970
Rent expense	4,400
Prepaid expenses	875
Capital contributions by owners	6,000
Prepaid insurance	940
Accounts receivable	3,900
Owner's capital	6,000
Utilities expense	1,500
Cash received from debt	6,500
Unearned revenue	1,900
Loan payable, due in 2020	7,500
Insurance expense	1,950
Purchase of intangibles	4,810
Supplies expense	2,340
Website design	4,750
Income tax payable	1,260

Create both the income statement and the statement of cash flows in good form (meaning proper format, headings, subheadings, totals and subtotals).

Also – answer the additional questions that follow the spaces for your statements.

Name TWO items that appear on the multi-step income statements but not on the single-step income statement.

For each of the items below, indicate which section of the statement of cash flows it would belong in, and whether it is a cash inflow or outflow.

(Enter O+, O-, I+, I-, F+, or F-)

Cash paid for financing charges (interest)
Purchase of equipment
Receipt of a bank loan

Answer 1

Inckme statement

Revenue
service revenue	22,300
Total Revenue	22,300
Expenses
Advertising	2,970
commission	-
Depreciation	-
Insurance	1,950
Office supply	440
Rent	4,400
Utility Expense	1,500
Telephone Expenses	2,650
Interest exp	-
Website Expense	2,780
Supply exp	2,340
Office Supply exp	560
Total Expense	19,590
Net Income before Tax	2,710
Income Tax exp	1,260
Income from Continuous Operations	1,450

Cash flow statement

Operations
Cash Receipt from Customers	38,200
Cash paid for
Cash paid to supplier	30,723
Net Cash flow from operations	7,477
Investing Activities
Cash Receipts
cash received from debt	-
Cash paid for
Purchase of intangible	4,810
Net cash flow from investing activities	-4,810
Financing Activity
Cash Receipts for
Cash Receipts from debt	6,500
Cash paid for
Repayment	-
Net cash flow from finance activity	6,500
Net iincrease in cash	9,167
cash end of year	9,167

items that appear on multi step income statement but not on single step income statements

1. sales return and allowances

2. supply expenses

Cash paid for financing charges (interest)	O-
Purchase of equipment	I-
Receipt of a bank loan	F+