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Acquired $30,000 cash from the issue of common stock. Borrowed $42,000 cash from National Bank. Earned...

Acquired $30,000 cash from the issue of common stock. Borrowed $42,000 cash from National Bank. Earned cash revenues of $58,000 for performing services. Paid cash expenses of $50,000. Paid a $2,000 cash dividend to the stockholders. Acquired an additional $30,000 cash from the issue of common stock. Paid $11,000 cash to reduce the principal balance of the bank note. Paid $51,000 cash to purchase land. Determined that the market value of the land is $71,000. Determine the amount of total assets that Maben would report on the December 31, 2018, balance sheet.

Maben Company was started on January 1, 2018, and experienced the following events during its first year of operation:

  1. Acquired $30,000 cash from the issue of common stock.

  2. Borrowed $42,000 cash from National Bank.

  3. Earned cash revenues of $58,000 for performing services.

  4. Paid cash expenses of $50,000.

  5. Paid a $2,000 cash dividend to the stockholders.

  6. Acquired an additional $30,000 cash from the issue of common stock.

  7. Paid $11,000 cash to reduce the principal balance of the bank note.

  8. Paid $51,000 cash to purchase land.

  9. Determined that the market value of the land is $71,000.

Required

  1. 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.)

Solutions

Expert Solution

MABEN COMPANY
Horizontal Statements Model for 2018
Event No. Balance Sheet Income Statement Statement of Cash Flows
Assets = Liabilities + Stockholders' Equity Revenue – Expense = Net Income
Cash + Land = Notes Payable + Common Stock + Retained Earnings
1 $     30,000 + = + $    30,000 + – = $       30,000 FA
2 $     42,000 + = $     42,000 + + – = $       42,000 FA
3 $     58,000 + = + + $       58,000 $     58,000 – = $     58,000 $       58,000 OA
4 $    -50,000 + = + + $     -50,000 – $    50,000 = $    -50,000 $     -50,000 OA
5 $      -2,000 + = + + $       -2,000 – = $       -2,000 FA
6 $     30,000 + = + $    30,000 + – = $       30,000 FA
7 $    -11,000 + = $    -11,000 + + – = $     -11,000 FA
8 $    -51,000 + $        51,000 = + + – = $     -51,000 IA
9 $             -   + = + + – = $              -   NC
Total $     46,000 + $        51,000 = $     31,000 + $    60,000 + $         6,000 $     58,000 – $    50,000 = $       8,000 $            46,000
Total assets = 46000+51000 = $         97,000
Total Liab:+Equity = 31000+60000+6000 = $         97,000

ekkarill92 answered 1 year ago
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