Financial Accounting: An Integrated Statements Approach, 2nd Edition

Chapter 1 The Role of Accounting in Business 41

Instructions

1. Would you classify a realty business like Ameba Realty as a manufacturing, merchandis-
   ing, or service business?


2. By analyzing the interrelationships between the financial statements, determine the
   proper amounts for (a) through (o).

Ameba Realty

Retained Earnings Statement

For the Month Ended June 30, 2006

Net income for June $ (c) 11

Less dividends (d) 11

Retained earnings, June 30, 2006 $ (e) 11

Ameba Realty

Balance Sheet

June 30, 2006

Assets

Cash $11,800

Supplies 800

Land (f)

Total assets $ (g)

Liabilities

Accounts payable $ 960

Stockholders’ Equity

Capital stock $ (h)

Retained earnings (i) (j)

Total liabilities and stockholders’ equity $ (k)

Ameba Realty

Statement of Cash Flows

For the Month Ended June 30, 2006

Cash flows from operating activities:

Cash received from customers $ (l)

Deduct cash payments for expenses and

payments to creditors 9,400

Net cash flows from operating activities $ (m)

Cash flows from investing activities:

Cash payments for acquisition of land 28,800

Cash flows from financing activities:

Cash received from issuing capital stock $36,000

Deduct dividends 4,800

Net cash flows from financing activities (n)

Net cash flow and June 30, 2006, cash balance $ (o)