Question

Problem 2-36 Identifying and arranging elements on financial statements LO 2-7 The following accounts and balances were drawn from the records of Dawkins Company at December 31, 2014: Cash $ 11,600 Accounts receivable $ 19,000 Land 38,000 Cash flow from operating act. 7,800 Insurance expense 1,100 Beginning retained earnings 4,070 Dividends 4,900 Beginning common stock 900 Prepaid insurance 2,400 Service revenue 85,000 Accounts payable 29,500 Cash flow from financing act. 5,400 Supplies 830 Ending common stock 4,800 Supplies expense 240 Cash flow from investing act. (6,500 ) Rent expense 2,300 Other operating expenses 43,000 Required Use the accounts and balances from Dawkins Company to construct an income statement. Use the accounts and balances from Dawkins Company to construct statement of changes in stockholders’ equity. Use the accounts and balances from Dawkins Company to construct balance sheet. Use the accounts and balances from Dawkins Company to construct statement of cash flows (show only totals for each activity on the statement of cash flows). (Enter cash outflows as negative amounts.)

Answer 1

Income statement
Service revenue		85000
Expenses
Salaries
Insurance		1100
Rent		2300
Other expenses		43000
Supplies expense		240
Total expenses		46640
Net income		38360

Statement of changes in equity
		Common stock	Retained earnings	Total
Balance Jan.1		900	4,070	4,970
Issue of stock		3,900		3,900
Less dividends			-4,900	-4,900
Net income			38,360	38,360
Closing balance		4,800	37,530	42,330

Balance sheet
Assets		Liabilities
Current assets		Current liabilities
Cash	11,600	Accounts payable	29,500
Accounts receivable	19,000
Prepaid insurance	2,400
Supplies	830
Total current assets	33,830
		Total current liabilities	29,500
Long term assets
			-
	-	Toal liabilities	29,500
Land	38,000
		Stockholders equity
		Common stock	4,800
		Retained earnings	37,530
		Total stockholders equity	42,330
Total long term assets	38,000
Total assets	71,830	Total	71,830

Cash flow from operating activities	7800
Cash flow from financing activities	5400
Cash flow from investing activities	-6500
Net change in cash	6700