Oregon CoBegan Operations on January 1,2016,by Issuing $10,000 in Common Stock

Oregon Co.began operations on January 1,2016,by issuing $10,000 in common stock to the stockholders.On March 1,2016,Oregon accepted an advance of $36,000 to provide services for a one-year period beginning April 1.During 2016,services in the amount of $32,000 were provided to customers on account,and 80% of this amount was collected by year-end.During 2016,operating expenses incurred on account were $24,000,and 60% of this amount was paid by year-end.During the year,Oregon paid $1,200 to purchase supplies.By year-end,$1,080 of the supplies had been used.Dividends to stockholders were $2,000 during the year.During 2016,Oregon paid salaries of $28,000,and on December 31,2016,the company accrued salaries of $2,800.
Oregon recorded all appropriate adjusting entries at year end.
1)What would Oregon report for service revenue for 2016?
2)What would Oregon report for salaries expense for 2016?
3)What would Oregon report for supplies expense for 2016?
4)What would the amount be for net cash flows from operating activities for 2016?
5)What is the net income for 2016?
6)What would the balance in the retained earnings account be at December 31,2016?

Correct Answer:

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1)$32,000 rev.on account + ($36,000 x 9/...

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