- Solomon Manufacturing Company Experienced The Following Accounting Events During Its First Year Of Operation With The E 1 (59.16 KiB) Viewed 46 times
are wrong apparently... Thanks!!
Solomon Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared in accordance with GAAP. 1. Acquired $52,000 cash by issuing common stock. 2. Paid $7,200 for the materials used to make its products, all of which were started and completed during the year. 3. Paid salaries of $3,900 to selling and administrative employees. 4. Paid wages of $6,100 to production workers. 5. Paid $4,000 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,600 estimated salvage value and a two-year useful life. 6. Paid $12,900 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,200 estimated salvage value and a three-year useful life. 7. Sold inventory to customers for $26,400 that had cost $13,800 to make. Required Indicate how these events would affect the balance sheet and income statement by recording them in a horizontal financial statements model as indicated here. The first event is recorded as an example. (Enter any decreases to account balances with a minus sign. For changes on the Statement of Cash Flows, Indicate whether the item is an operating activity (OA), Investing activity (IA), financing activity (FA).) Balance Sheet Income Statement Assets Event No. Stockholders' Equity Cash Flow Ret. Cash + Inventory + + Common stock Ear. Exp. 1 52,000 + + 52,000 FA 2 (7,200) 7,200 + + (7,200) OA 3 (3,900) + (3,900) (3,900) 4 (6,100) 6,100 + + (6,100) (4,000) 5a (4,000) + + + 5b + + (1,600) 6a (12,900) + + (12,900) 12,900 + (3.600) + 6b 3,600 + 7a 26,400 + + 26,400 28,400 7b (26,400) (13,800) (45,700) 26,400 Total 44,300 + 9,300 + 44,300 + + + ++ (13,800) + ++ ++ 3,100 + BV Manuf. Equip. ++ BV Office Furn. = = 4,000 = (1,600) = = = 2,400 = 52,000 + + ++++ + +++++ 52,000+ Rev. I || = = 3,900 = = = 1,600 = = = 13,800 19,300 = Net Inc. 0 8884 OA OA IA IA OA