I-01.09 Problem

I-01.09 Problem - $ Accounts receivable 15,000 Equipment...

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I-01.09 Harish Company was formed on January 1, 20X1. The company's accountant prepared the following income statement, statement of retained earnings, and balance sheet at the conclusion of the first full year of operations. Mr. Harish desires for the company to declare and pay a dividend equivalent to the company's net income for the year. HARISH COMPANY Income Statement For the Year Ending December 31, 20X1 Revenues Services to customers 70,000 $ Expenses Wages 30,000 $ Rent 12,000 42,000 Net income 28,000 $ HARISH COMPANY Statement of Retained Earnings For the Year Ending December 31, 20X1 Beginning retained earnings - $ Plus: Net income 28,000 28,000 $ Less: Dividends - Ending retained earnings 28,000 $ HARISH COMPANY Balance Sheet December 31, 20X1 Assets Cash 4,000
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Unformatted text preview: $ Accounts receivable 15,000 Equipment 50,000 Total assets 69,000 $ Liabilities Rent payable 1,000 $ Notes payable 30,000 Total liabilities 31,000 $ Stockholders' equity Capital stock 10,000 $ Retained earnings 28,000 Total stockholders' equity 38,000 Total Liabilities and equity 69,000 $ 1 of 2 I-01.09 (a) Is the company currently able to declare and pay the dividend? Why or why not? (b) Explain why net income can differ from cash provided by operations. (c) In addition to operating activities, what other "categories" of business activity can generate or expend cash? Provide examples for each category. (d) Prepare a statement of cash flows for Harish Company for the year ending December 31, 20X1. 2 of 2...
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I-01.09 Problem - $ Accounts receivable 15,000 Equipment...

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