During 2011 Rustic Camp Sites experienced the following transactions.
1. RCS acquired $32,000 cash by issuing common stock.
2. RCS received $116,000 cash for providing services to customers (leasing camp sites).
3. RCS paid $13,000 cash for salaries expense.
4. RCS paid a $9,000 cash dividend to the owners.
5. RCS sold land that had cost $100,000 for $100,000 cash.
6. RCS paid $47,000 cash for other operating expenses.
a. Record the transaction data in a horizontal financial statements model like the following one. In the Cash Flow column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The beginning balances have been recorded as an example. They are the ending balances shown on RCS’s December 31, 2010, financial statements illustrated in the chapter. Note that the revenue and expense accounts have a zero beginning balance. Amounts in these accounts apply only to a single accounting period. Revenue and expense account balances are not carried forward from one accounting period to the next.
b. Explain why there are no beginning balances in the Income Statement columns.
c. What amount of net income will RCS report on the 2011 income statement?
d. What amount of total assets will RCS report on the December 31, 2011, balance sheet?
e. What amount of retained earnings will RCS report on the December 31, 2011, balance sheet?
f. What amount of net cash flow from operating activities will RCS report on the 2011 statement of cash flows?
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