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25. For each of the transactions listed below, indicate whether it is an operating (O), investing (I) or financing (F) activity on the statement of cash flows. Also, indicate if the transaction increases (+) or decreases (-) cash. 12 points
Transaction
Type of Activity
Effect on Cash
A)
B)
C)
D)
E)
F)
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26. Record the following transactions for Red Eye Company indicating the account affected and whether the account increased (+) or decreased (-). 18 points
Transaction Assets Liabilities Stockholders Equity -15,000 +20,000 -5,000 -18,000 +2,000 +35,000 +/- 30,000 +20,000 -8,000 +75,000 -8,000 +75,000 +20,000 -2,000 +35,000
A) B) C) D) E) F) G) H) I) J)
Paid dividends of $15,000 Borrowed $20,000 cash by signing a note payable with the bank Repaid loan of $5,000 Paid operating expenses of $18,000 Purchased supplies on account, $2,000 Earned $35,000 of revenue on account Collected $30,000 accounts receivable Sold stock to new investors for $20,000 cash Paid accounts payable, $8,000 cash Received cash for services provided, $75,000
27. The accounts with identification letters for Ward Company are listed below.
Letter A B C D E F
Account Title Cash Accounts receivable Supplies Prepaid Insurance Equipment Accounts payable
Letter G H I J K
Account Title Notes payable Contributed capital Retained earning Revenue Operating expenses
During 2010, the company completed the transactions given below. Indicate the appropriate
journal entry for each transaction by giving the account letter and amount. 11 points
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1) 2) 3)
4) 5) 6)
28. On September 1, 2011, Fast Track, Inc. was started with $30,000 invested by the owners as contributed capital. On September 30, 2011, the accounting records contained the following amounts:
Prepare an income statement (in good form, on the page below) for September for the first month of Fast Track's operation. Ignore income taxes. 12 points
9/21/11
Fast Track, Inc Income Statement For the Month Ended September 31,2011
Operating Revenues Consulting Fees Revenue Total Operating Revenues Operating Expenses Office supplies expense Rent Expense Telephone Expense Salary Expense Depreciation Expense Total Operating Expenses $600 2,400 250 6, 900 500 10,650 $19,200 19,200
Net Income
$8,550
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