The Extra Surplus Company's Balance Sheet for December 31, 2015 and the Income Statement for 2016 are shown below. Additional data:
• Sales were $13,000; $8,000 in cash was received from customers.
• Bought new land for cash, $10,000.
• Sold other land for its book value of $5,000.
• Paid $1,000 principal on the long-term note payable and $1,000 in interest.
• Issued new shares of stock for $10,000 cash.
• Cash dividends of $1,000 were declared and paid to stockholders.
• Paid $5,500 on accounts payable.
• No inventory purchases were made; other expenses were incurred on account.
• All wages were paid in cash.
• Other expenses were on account.
Required:
Part a. Prepare a balance sheet at December 31, 2016.
Part b. Prepare the statement of cash flows using the direct method.

Question

The Extra Surplus Company's Balance Sheet for December 31, 2015 and the Income Statement for 2016 are shown below.   Additional data:
• Sales were $13,000; $8,000 in cash was received from customers.
• Bought new land for cash, $10,000.
• Sold other land for its book value of $5,000.
• Paid $1,000 principal on the long-term note payable and $1,000 in interest.
• Issued new shares of stock for $10,000 cash.
• Cash dividends of $1,000 were declared and paid to stockholders.
• Paid $5,500 on accounts payable.
• No inventory purchases were made; other expenses were incurred on account.
• All wages were paid in cash.
• Other expenses were on account.
Required:
Part a. Prepare a balance sheet at December 31, 2016.
Part b. Prepare the statement of cash flows using the direct method.

Quizplus · Accepted Answer

The Answer of The Extra Surplus Company's Balance Sheet for December 31, 2015 and the Income Statement for 2016 are shown below.   Additional data:
• Sales were $13,000; $8,000 in cash was received from customers.
• Bought new land for cash, $10,000.
• Sold other land for its book value of $5,000.
• Paid $1,000 principal on the long-term note payable and $1,000 in interest.
• Issued new shares of stock for $10,000 cash.
• Cash dividends of $1,000 were declared and paid to stockholders.
• Paid $5,500 on accounts payable.
• No inventory purchases were made; other expenses were incurred on account.
• All wages were paid in cash.
• Other expenses were on account.
Required:
Part a. Prepare a balance sheet at December 31, 2016.
Part b. Prepare the statement of cash flows using the direct method.