Income Statement, Statement Of Cash Flows And KLM Case Study - Accounting and Finance Assignment Help

Assignment Task 

During 2019 the following transactions occurred:

1. Collections from customers were $753.

2. A machine (PP&E) was purchased for $250, all in cash.

3. The total cost of goods sold during the year was $656.

4. Sales, all on credit, were $777.

5. Marketing expenses were $25; of this amount, $18 was paid in cash.

6. The CEO of KLM announced she would resign her position effective June 30, 2020.

7. KLM purchased $666 worth of inventory, on account.

8. The employees of KLM earned $48 as wages.  Cash payments to employees were $42.

9. Payments on accounts payable were $777.

10. Depreciation expense was $30.

11. Rent in the amount of $30 was paid, in cash, during the year.  The “Prepaid rent” account balance at the end of the year was $3.

12. The ABC company was supposed to pay KLM $5 as interest for 2019 on its loan; however, due to a strike in the postal service the payment had arrived on January 15, 2020.

13. A dividend of $48 was declared during 2019, but was not paid.

14. A long-term loan in the amount of $50 was taken from a local bank.

Required:

a. What was the balance of the Cash account on December 31, 2018?

b. Record all the transactions that occurred during 2019. You may use journal entries or the accounting equation to record transactions. 

c. Prepare an Income Statement for the year ended December 31, 2019.

d. Prepare a Balance Sheet for December 31, 2019.  

e. Prepare a Statement of Cash Flows for the year ended December 31, 2019.  Use the indirect approach.

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