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Liberty University ACCT 211 Individual Learning Project Answers Complete Solutions
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Question 1
Karla Tanner opened a web consulting business called Linkworks and recorded the following transactions in its first month of operations.
Apr. 1
Tanner invests $80,000 cash along with office equipment valued at $26,000 in the company in exchange for common stock.
Apr. 2
The company prepaid $9,000 cash for twelve months’ rent for office space. The company’s policy is record prepaid expenses in balance sheet accounts.
Apr. 3
The company made credit purchases for $8,000 in office equipment and $3,600 in office supplies. Payment is due within 10 days.
STATUS
Apr. 6
The company completed services for a client and immediately received $4,000 cash.
Apr. 9
The company completed a $6,000 project for a client, who must pay within 30 days.
Apr. 13
The company paid $11,600 cash to settle the account payable created on April 3.
Apr. 19
The company paid $2,400 cash for the premium on a 12-month insurance policy. The company’s policy is record prepaid expenses in balance sheet accounts.
Apr. 22
The company received $4,400 cash as partial payment for the work completed on April 9.
Apr. 25
The company completed work for another client for $2,890 on credit.
Apr. 28
The company paid $5,500 cash in dividends.
Apr. 29
The company purchased $600 of additional office supplies on credit.
Apr. 30
The company paid $435 cash for this month’s utility bill.
a) On April 2, the company prepaid $9,000 cash for twelve months’ rent for office space.
b) The balance in Prepaid insurance represents the premium paid for a 12-month insurance policy the policy’s coverage began on April 1.
c) Office supplies on hand as of April 30 total $1,200.
d) Straight-line depreciation of office equipment, based on a 5-year life and a $4,000 salvage value, is $500 per month.
e) The company has completed work for a client, but has not yet billed the $1,800 fee.
f) Wages due to employees, but not yet paid, as of April 30 total $2,600.
Question 2
Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her business using the following financial data.
Prepare a statement of cash flows for Business Solutions using the indirect method for the three months ended March 31, 2018. Owner Santana Rey contributed $32,000 to the business in exchange for additional stock in the first quarter of 2018 and has received $4,100 in cash dividends. (Amounts to be deducted should be indicated with a minus sign.)
