Problem 2-35 Effect of events on financial statements LO 2-1, 2-2, 2-3, 2-4, 2-5, 2-6
Davis Company had the following balances in its accounting records as of December 31, 2013:
Assets
Liabilities and Equity
Cash
$
51,000
Accounts Payable
$
25,000
Accounts Receivable
52,000
Common Stock
95,000
Land
30,000
Retained Earnings
13,000
Totals
$
133,000
$
133,000
The following accounting events apply to Davis for 2014:
Jan.
1
Acquired an additional $54,000 cash from the issue of common stock.
April
1
Paid $5,400 cash in advance for a one-year lease for office space.
June
1
Paid a $2,300 cash dividend to the stockholders.
July
1
Purchased additional land that cost $30,000 cash.
Aug.
1
Made a cash payment on accounts payable of $18,000.
Sept.
1
Received $8,600 cash in advance as a retainer for services to be performed monthly
during the next eight months.
Sept.
30
Sold land for $24,000 cash that had originally cost $24,000.
Oct.
1
Purchased $1,130 of supplies on account.
Dec.
31
Earned $56,000 of service revenue on account during the year.
31
Received $64,000 cash collections from accounts receivable.
31
Incurred $12,000 other operating expenses on account during the year.
31
Recognized accrued salaries expense of $5,600.
31
Had $200 of supplies on hand at the end of the period.
31
The land purchased on July 1 had a market value of $46,000.
31
Recognized $122 of accrued interest revenue.
31
Recognized the earning of cash received in advance for the lease for office space.
31
Recognized the cash received in advance for services to be performed monthly.
31
Recognized the earning of cash received in advance for the lease for office space.
31
Recognized the cash received in advance for services to be performed monthly.
Based on the preceding information for Davis Company answer the following questions. All questions pertain to the 2014 financial statements. (Hint: Record the events in general ledger accounts under an accounting equation before answering the questions.) (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.)