The following transactions apply to Baker Co. for 2010, its first year of operations. 1.Issued $190,000 of common stock for cash.

The following transactions apply to Baker Co. for 2010, its first year of operations.

1.Issued $190,000 of common stock for cash.

2.Provided $98,000 of services on account.

3.Collected $88,000 cash from accounts receivable.

4.Loaned $9,000 to BBC on September 1, 2010. The note had a one-year term to maturity and an 8 percent interest rate.

5.Paid $38,000 of salaries expense for the year.

6.Paid a $3,000 dividend to the stockholders.

7.Recorded the accrued interest on December 31, 2010 (see item 4).

8.Uncollectible accounts expense is estimated to be 1 percent of sales on account.

rev: 03-01-2011  1. value:2.00 points Required information

Requirement 1:

Show the effects of the above transactions in a horizontal statements model like the one shown below. When you record amounts in the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), financing activity (FA), or Net Cash (NC). The letters NA indicate that an element is not affected by the event. (Round your final answers to the nearest dollar amount. Negative amounts should be indicated with a minus sign. Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)

Baker Co. Horizontal Statement Model

Balance SheetIncome StatementStatement ofCash Flows

EventAssets=EquityRev.–Exp.=Net Inc.

CashAccts. Rec.AllowNotes Rec.Int. Rec.=Com. StockRet. Earn.

1.              (Click to select)IANCOANAFA

2.              (Click to select)NCNAOAFAIA

3.              (Click to select)NAOAIAFANC

4.              (Click to select)NANCFAIAOA

5.               (Click to select)FANCOANAIA

6.               (Click to select)NAIANCFAOA

7.1              (Click to select)NCOAIAFANA

8.2              (Click to select)IAOANCNAFA

Tot.

=

–

=

(Click to select)NCFAOANAIA

References eBook & Resources WorksheetLearning Objective: 05-2 Difficulty: HardLearning Objective: 05-4Check my work  2. value:2.00 points Required information

Requirement 2:

Prepare the income statement, balance sheet, and statement of cash flows for 2010. (Round your final answers to the nearest dollar amount. Amounts in parentheses do not require a minus sign in front of them. Be sure to list the expenses on the income statement in order of their magnitude. Be sure to list the assets and liabilities in order of their liquidity. Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)

Baker Co.Financial StatementsFor the Year Ended 2010

Income Statement

(Click to select)Net Operating IncomeService RevenueInterest RevenueSalaries ExpenseUncoll. Accounts Expense $

Operating Expenses

(Click to select)Service RevenueNet Operating IncomeUncoll. Accounts ExpenseInterest RevenueSalaries Expense$

(Click to select)Service RevenueUncoll. Accounts ExpenseSalaries ExpenseNet Operating IncomeInterest Revenue

Total Operating Expenses

()

(Click to select)Salaries ExpenseNet Operating IncomeInterest RevenueService RevenueUncoll. Accounts Expense

Non-Operating Items

(Click to select)Salaries ExpenseInterest RevenueNet Operating IncomeUncoll. Accounts ExpenseService Revenue

(Click to select)Net LossNet Income

Baker Co.Financial StatementsFor the Year Ended 2010

Statement of Changes in Stockholders’ Equity

(Click to select)Net IncomeEnding Common StockBeginning Common StockDividendsStock Issued$

(Click to select)LessPlus: (Click to select)Ending Common StockBeginning Common StockStock IssuedDividendsNet Income

(Click to select)Stock IssuedBeginning Common StockEnding Common StockNet IncomeDividends $

(Click to select)Beginning Retained EarningsStock IssuedDividendsEnding Retained EarningsNet Income

(Click to select)LessPlus: (Click to select)Stock IssuedBeginning Common StockNet IncomeEnding Common StockDividends

(Click to select)LessPlus: (Click to select)DividendsNet IncomeBeginning Common StockStock IssuedEnding Common Stock

()

(Click to select)Stock IssuedDividendsEnding Retained EarningsBeginning Retained EarningsNet Income

Total Stockholders’ Equity

$

Baker Co.Balance SheetAs of the End of the Year 2010

Assets    Liabilities $

(Click to select)Notes ReceivableCashInterest ReceivableAccounts ReceivableCommon Stock $

(Click to select)Common StockAccounts ReceivableInterest ReceivableNotes ReceivableCash     Stockholders’ Equity

(Click to select)Common StockRetained EarningsDividendsAccounts payableAllowance for Doubtful Accounts

()

(Click to select)Accounts ReceivableRetained EarningsInterest ReceivableCommon StockNotes Receivable  $       (Click to select)CashNotes ReceivableInterest ReceivableAccounts ReceivableCommon Stock       (Click to select)Common StockRetained EarningsInterest ReceivableNotes ReceivableAccounts Receivable

(Click to select)CashAccounts ReceivableNotes ReceivableInterest ReceivableCommon Stock     Total Stockholders’ Equity

Total Assets

$

Total Liabilities and Stockholders’ Equity

$

Baker Co.Statement of Cash FlowsFor the Year Ended 2010

Cash Flow From Operating Activities:

(Click to select)Cash Outflow for DividendsInflow from CustomersCash Inflow from Stock IssuedBeginning Cash BalanceOutflow for Notes Receivable$

(Click to select)Cash Outflow for DividendsBeginning Cash BalanceCash Inflow from Stock IssuedOutflow for Notes ReceivableOutflow for Expenses

()

Net Cash Flow from Operating Activities $

Cash Flows From Investing Activities:

(Click to select)Outflow for ExpensesInflow from CustomersCash Outflow for DividendsOutflow for Notes ReceivableCash Inflow from Stock Issued ()

Cash Flow From Financing Activities:

(Click to select)Cash Inflow from Stock IssuedBeginning Cash BalanceInflow from CustomersOutflow for ExpensesOutflow for Notes Receivable

(Click to select)Outflow for Notes ReceivableCash Outflow for DividendsOutflow for ExpensesInflow from CustomersBeginning Cash Balance

()

Net cash Flow from Financing Activities

Net Change in Cash

(Click to select)PlusLess: (Click to select)Beginning Cash BalanceCash Inflow from Stock IssuedOutflow for Notes ReceivableInflow from CustomersOutflow for Expenses

Ending Cash Balance

$

rev: 03-01-2011 References eBook & Resources WorksheetLearning Objective: 05-2 Difficulty: HardLearning Objective: 05-4Check my work

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