The following information, in T account format, is provided for the M & M Company for the year 2003:
|
Cash Account |
|||
|
Beg. Bal. |
15,400 |
(b) |
56,500 |
|
(a) |
147,000 |
(c) |
23,000 |
|
(d) |
3,500 |
(f) |
59,700 |
|
(e) |
15,000 |
(g) |
1,600 |
|
End. Bal. |
37,700 |
(h) |
2,400 |
Additional information:
a.Sales revenue for the period was $145,000. Accounts receivable (net) decreased $2,000 during the period.
b.Net purchases of $58,000 were made during 2003, all on account. Accounts payable increased $1,500 during the period.
c.The equipment account increased by $18,000 during the year.
d.One piece of equipment that cost $5,000, with a net book value of $3,000, was sold for a $500 gain.
e.The company borrowed $15,000 from its bank during the year.
f.Various operating expenses were all paid in cash, except for depreciation of $1,800. Total operating expenses were $61,500.
g.Interest expense for the year was $1,200. The interest payable account decreased by $400 during the year.
h.Income tax expense for the year was $3,600. The income taxes payable account increased by $1,200 during the year.
1.From the information given, reconstruct the journal entries that must have been made during the year (omit explanations).
2.Prepare a statement of cash flows for M & M Company for the year ended December 31, 2003.