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20000 netcashincreasedecreasedueto 7400 23200 11200

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Unformatted text preview: ease in allowance for doubtful accounts 500 Decrease in accounts payable (1,000) Decrease in discount on note payable 200 Increase in accounts receivable (5,000) Decrease in inventory 2,000 Decrease in deferred revenues (1,000) Total adjustments (2,300) $ Net cash increase (decrease) due to operating activities (3 0 0 ) Cash flows from investing activities: Purchase of long­lived assets (1,000) Net cash increase (decrease) due to $ investing activities (1,000) Cash flows from financing activities: Cash paid for dividends Proceeds from issuance of common stock Net cash increase (decrease) due to $ (7 0 0 ) 6,000 financing activities 5,300 Net increase in cash $ 4,000 Beginning cash balance, January 1, 2012 6,000 Ending cash balance, December 31, 2012 $ 10,000 P14–14 a. 60,000 Stock (+SE) 1. Cash (+A) C o mmo n 60,000 Issued common stock. 2. Inventory (+A) 20,000 Accounts Payable (+L) 20,000 Purchased inventory on account. 3. Prepaid Rent (+A) 7,000 Cash (–A) 7,000 Prepaid rent. 4. Furniture (+A) 30,000 Cash (–A) 20,000 Long­Term 10,000 Payable (+L) Purchased furniture. Note P14–14 Continued 5a. Accounts Receivable (+A) 35,200 Sales (R, +SE) 35,200 Made sales on account. 5b. Cost of Goods Sold (E, –SE) 8,800 Inventory (–A) 8,800 Recognized cost of inventory sold. 6. Accounts Payable (–L) 10,000 Cash (–A) 10,000 Made payment to suppliers. 7. Cash (+A) (–A) 12,000 Accounts Receivable 12,000 Collected cash from customers. 8. Miscellaneous Expenses (E, –SE) 10,000 Cash (–A) 10,000 Incurred and paid miscellaneous expenses. 9. Depreciation Expense (E, –SE) Depreciation (–A) 5,000 Accumulated 5,000 Depreciated furniture. 10. Interest Expense (E, –SE) Payable (+L) 1,000 Accrued Interest 1,000 Incurred, but did not pay, interest. 11. Dividends (–SE) 3,000 Dividends Payable (+L) 3,000 Declared dividends. 12. Rent Expense (E, –SE) 3,000 Prepaid Rent (–A) 3,000 Used portion of prepaid rent. b. ISS, Inc. Income Statement For the Year Ended December 31, 2012 Sales Cost of goods sold Depreciation expense $ 35,200 (8,800) (5,000) Rent expense Interest expense Miscellaneous expenses Net income (3,000) (1,000) (10,000) $ 7,400 P14–14 Continued ISS, Inc. Statement of Retained Earnings For the Year E...
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