ACC 201 Homework 7 correct

6000 cost 8 manager salary 1200 1200 1200 1200 1200

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6,000 Cost 8: Manager Salary 1,200 1,200 1,200 1,200 1,200 6,000 Cost 9: Advertising 4,200 4,200 4,200 4,200 4,200 21,000 Cost 10: Insurance 1,200 1,200 1,200 1,200 1,200 6,000 Cost 11: 0 0 0 0 0 0 Cost 12: 0 0 0 0 0 0 Cost 13: 0 0 0 0 0 0 Cost 14: Accounting fees 100 100 100 100 100 500 Cost 15: Interest payments 40 40 40 40 40 200 Cost 16: 0 0 0 0 0 0 Cost 17: 0 0 0 0 0 0 Cost 18: Permits/Licensing/Busin. Exp. 300 300 Cost 19: Miscellaneous 500 500 Cost 20: 0 0 Cost 21: 0 0 Cost 22: 0 0 Depreciation of cost 24-25 260 260 260 260 260 1,300 Total expenses 10,800 10,360 10,720 10,720 10,720 53,320 Earnings = Net Income 5,400 9,080 11,960 11,960 11,960 50,360 Balance Sheets at the end of Y1 Y2 Y3 Y4 Y5 Use of Funds Current assets Cash 1,887 2,147 2,407 2,667 1,927 A/C Receivable Inventories Total current assets 1,887 2,147 2,407 2,667 1,927 Long-term assets Land 0 Building 0 Equipments 1,300 1,300 1,300 1,300 1,300 Less Accumulated depreciation 260 520 780 1,040 1,300 Total long-term assets 1,040 780 520 260 0 Total Assets 2,927 2,927 2,927 2,927 1,927 Source of Funds Current liabilities A/C Payable Notes Payable Total current liabilities 0 0 0 0 0 Long-term liabilities Loan payable 1,000 1,000 1,000 1,000 0 Bonds payable Total long-term liabilities 1,000 1,000 1,000 1,000 0 Contributed capital 1,927 1,927 1,927 1,927 1,927 Total contributed capital 1,927 1,927 1,927 1,927 1,927 Retained earnings Beginning Retained Earnings 0 0 0 0 0 Earnings 5,400 9,080 11,960 11,960 11,960 Less Dividends 5,400 9,080 11,960 11,960 11,960 Total retained earnings 0 0 0 0 0 Total Liabilities + Owner's Equity 2,927 2,927 2,927 2,927 1,927
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Financial Accounting Fundamentals Financial Accounting is an activity that transaltes day to day business transactions into a set of financial statements. These statements are used by economic agents outside the organization (investors, creditors etc.) to make decisions. Naturally, outsiders will be concerned about the believability and comparability of the statements prepared by a firm's management. These concerns have given rise to the Generally Accepted Accounting Principles (GAAP) that these statements must satify. The main idea behind all GAAP rules is that use of funds has to equal the source of funds at any point in time.
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