Sioux Company began operations when it used common Stock for $80,000 cash. It paid $60,000 cash in advance for a one-year contract to lease delivery equipment for the business. Is signed the lease agreement on March 1, 2015, which was effective immediately. Sioux received $98,000 of cash revenue in 2015.
a. Record the March 1 cash payment in general journal format
b. Record in general journal format, the adjustment required as of December 31, 2015
c. Record all events in a horizontal statements model like this one:
Assets = Liability + Equity Revenue - Expenses = Net Income CashFlow
Cash + Prepaid Rent = Common Stock + Retained Earnings
d. What amount of net income will Sioux Company report on the 2015 income statement? What is the amount of net cash flow from operating activities in 2015?
e. Determine the amount of prepaid rent Sioux Company would report on the December 31, 2015, balance sheet.