Question

b-3. Prepare a year-end balance sheet for each year accounting period. (Please explain how you get Year 2 Cash under current Assets as well. Thank you:

Mark’s Consulting experienced the following transactions for 2018, its first year of operations, and 2019. Assume that all transactions involve the receipt or payment of cash.

Transactions for 2018

1. Acquired $60,000 by issuing common stock.

2. Received $125,000 cash for providing services to customers.

3. Borrowed $21,000 cash from creditors.

4. Paid expenses amounting to $58,000.

5. Purchased land for $35,000 cash.

Transactions for 2019

Beginning account balances for 2019 are:

Cash	$	113,000
Land		35,000
Notes payable		21,000
Common stock		60,000
Retained earnings		67,000

1. Acquired an additional $21,000 from the issue of common stock.

2. Received $132,000 for providing services.

3. Paid $16,000 to creditors to reduce loan.

4. Paid expenses amounting to $65,000.

5. Paid a $12,000 dividend to the stockholders.

6. Determined that the market value of the land is $45,000.

1. b-3. Prepare a year-end balance sheet for each year accounting period.

Answer 1

For any clarifications, please comment.