contestada

Faith Busby and Jeremy Beatty started the B&B partnership on January 1, Year 1. The business acquired $44,000 cash from Busby and $66,000 from Beatty. During Year 1, the partnership earned $42,000 in cash revenues and paid $18,400 for cash expenses. Busby withdrew $2,000 cash from the business, and Beatty withdrew $2,500 cash. The net income was allocated to the capital accounts of the two partners in proportion to the amounts of their original investments in the business.

Required:
Prepare an income statement, capital statement, balance sheet, and statement of cash flows for B&B’s 2016 fiscal year.

Respuesta :

abiolataiwo2015

If Faith Busby and Jeremy Beatty started the B&B partnership on January 1, Year. The income statement, capital statement, balance sheet, and statement of cash flows for B&B’s 2016 fiscal year are:

  • Income statement $23,600
  • Capital statement: Busby $51,440, Beatty $77,660
  • Balance sheet : Total Assets $129,100, Total Liabilities and Equity $129,100
  • Statement of cash flows for B&B’s $129,100

a. Income Statement

Income Statement for the year ended December 31, 2016  

Cash Revenues $42,000

Less: Cash Expenses ($18,400)

Net Income $23,600

($42,000-$18,400)

b. Capital statement

Capital Statement for the year ended December 31, 2016  

Busby Beatty

Beginning Capital Balance $44,000 $66,000

Less:- Withdrawal ($2,000) ($2,500)

Add:- Net Income $9,440 $14,160

[$44,000/($44,000+$66,000)×$23,600=$9,440]

[$66,000/($44,000+$66,000)×$23,600=$14,160]

Ending Capital Balance $51,440 $77,660

c. Balance Sheet

Balance Sheet As of December 31, 2016  

Assets  

Cash $129,100

($51,440+$77,660)

Total Assets  $129,100

Liabilities  

Equity  

Busby $51,440

Beatty $77,660  

Total Liabilities and Equity  $129,100

d. Cash Flow Statement

Cash Flow Statement  for the year ended December 31, 2016

Cash Flows from Operating Activities:  

Revenue from Operations      $42,000  

Operating Expenses           ($18,400)  

Net Cash flow from operating activities $23,600

($42,000-$18,400)

Net Cash flow from Investing activities  $0

Cash Flows from Financing Activities  

Proceeds from Partners $110,000

($44,000+$66,000)

Withdrawal by Partners ($4,500)

($2,000+$2,500)

Net cash flow from financing activities $105,500

($110,000-$4,500)

Net cash change   $129,100

($23,600+$0+$105,500)

Opening cash balance  $0

Ending Cash Balance  $129,100

Learn more here:

https://brainly.com/question/16751431

Otras preguntas