Question

Financial Statements

The transactions and integrated financial statement framework for Terry Mason for February 20Y4 appear below:

Terry Mason organized The Fifth Season at the beginning of February 20Y4. During February, The Fifth Season entered into the following transactions:

Terry Mason invested $32,375 in The Fifth Season in exchange for capital stock.

Paid $4,620 on February 1 for an insurance premium on a 1-year policy.

Purchased supplies on account, $3,900.

Received fees of $58,970 during February.

Paid expenses as follows: wages, $22,200; rent, $3,700; utilities, $1,850; and miscellaneous, $2,035.

Paid dividends of $7,770.

There was $2,730 of supplies on hand as of February 28.

Statement of Cash Flows Balance Sheet Assets = Liabilities + Stockholders' Equity Cash + Supplies + Prepaid Insurance = Accounts Payable + Common Stock + Retained Earnings a. Investment 32,375 32,375 b. Paid insurance –4,620 4,620     Balances 27,755 4,620 32,375 c. Purchased supplies 3,900 3,900     Balances 27,755 3,900 4,620 3,900 32,375 d. Fees earned 58,970 58,970     Balances 86,725 3,900 4,620 3,900 32,375 58,970 e. Paid expenses –29,785 –29,785     Balances 56,940 3,900 4,620 3,900 32,375 29,185 f. Paid dividends -7,770 -7,770     Balances 49,170 3,900 4,620 3,900 32,375 21,415 a1. Insurance expense -385 -385     Balances 49,170 3,900 4,235 3,900 32,375 21,030 a2. Supplies expense -1,170 -1,170     Balances, February 28 49,170 2,730 4,235 3,900 32,375 19,860 Statement of Cash Flows Income Statement a. Financing $32,375   d. Fees earned $58,970 b. Operating -4,620   e. Wages expense -22,200 d. Operating 58,970   e. Rent expense -3,700 e. Operating -29,785   e. Utilities expense -1,850 f. Financing -7,770   e. Miscellaneous expense -2,035    Increase in cash $49,170 a1. Ins. exp.   -385 a2. Supplies exp.   -1,170        Net income $27,630

Prepare an income statement for February.

The Fifth Season
Income Statement
For the Month Ended February 28, 20Y4
Cash		$
Operating expenses:
Wages expense	$
Rent expense
Utilities expense
Supplies expense
Dividends
Fees earned
Total expenses
		$

Prepare a retained earnings statement for February. If an amount box does not require an entry, leave it blank or enter zero "0".

The Fifth Season
Statement of Stockholders’ Equity
For the Month Ended February 28, 20Y4
	Common Stock	Retained Earnings	Total
Balance, February 1	$	$	$
	$
Balance, February 28	$	$	$

Prepare a balance sheet for February.

The Fifth Season
Balance Sheet
February 28, 20Y4
Assets
		$
Total assets		$
Liabilities
		$
Stockholders' Equity
	$
Total stockholders' equity
Total liabilities and stockholders' equity		$

Prepare a statement of cash flows for February. If your answer is zero enter "0". Enter net cash outflows as negative amounts.

The Fifth Season
Statement of Cash Flows
For the Month Ended February 28, 20Y4
Cash flows from operating activities:
	$
		$
Cash flows from financing activities:
	$
		$
		$

Answer 1