Yard Professionals Inc. experienced the following events in Year 1, its first ye
ID: 2338692 • Letter: Y
Question
Yard Professionals Inc. experienced the following events in Year 1, its first year of operation 2. Purchased $6,200 of supplies on account. 3. A physical count on December 1, Year 1, found that there was $1,260 of supplies on hand Required Based on this information alone the events in general ledger accounts under an accounting equation. b. Prepare an income statement, balance sheet, and statement of cash flows for the Year 1 accounting perlod. c. What is the balance in the Supplies account as of January 1, Year 2? d. What is the balance in the Supplies Expense account as of January 1, Year 2? deExplanation / Answer
Answer 1
YARD PROFESSIONALS INC.
Effect of event on accounting equation
Event
Assets
Liability
Stock holder's equity
Cash
Supplies
Account payable
Retained earnings
Provided service
16500
16500
Purchased supplies
6200
6200
Used supplies (6200-1260)
-4940
-4940
Total
16500
1260
6200
11560
Answer 2
YARD PROFESSIONALS INC.
Income statement
For the year ended December 31, Year 1
Service revenue
16500
Less: supplied used
4940
Net income
11560
Answer 3
YARD PROFESSIONALS INC.
Balance sheet
As at December 31, 20X1
Assets
Current assets
Cash
16500
Supplies
1260
Total assets
17760
Liabilities
Account payable
6200
Total liability
6200
Stockholder's equity
Retained earning
11560
Total stockholder's equity
11560
Total liability and stockholder's equity
17760
Answer 4
YARD PROFESSIONALS INC.
Cash flow statements
For the year ended December 31, Year 1
Cash flow from operating activity
Net income
11560
Add: increase in account payable
6200
Less: increase in supplies
-1260
Net cash flow from operating activity
16500
Cash flow from operating activity
0
Cash flow from operating activity
0
Net change in cash
16500
Add: beginning cash balance
0
Ending cash balance
16500
Answer 5
Balance of following account at January 1, year 2
Supplies
1260
This account considered under balance sheet. So, balance of this account is carry forward for next year.
Supplies expenses
0
This account considered under income statement. So balance of account become zeros every beginning of year.
YARD PROFESSIONALS INC.
Effect of event on accounting equation
Event
Assets
Liability
Stock holder's equity
Cash
Supplies
Account payable
Retained earnings
Provided service
16500
16500
Purchased supplies
6200
6200
Used supplies (6200-1260)
-4940
-4940
Total
16500
1260
6200
11560
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