Oregon Company Began Operations on January 1, Year 1, by Issuing

question 20

Essay

Oregon Company began operations on January 1, Year 1, by issuing $10,000 in common stock to the stockholders. During the year, services in the amount of $32,000 were provided to customers on account, and 80% of this amount was collected by year-end. During the year, operating expenses incurred on account were $24,000, and 60% of this amount was paid by year-end. The company paid $1,000 of dividends to stockholders during the year. During the year, Oregon paid salaries of $3,000, and on December 31, Year 1, the company accrued salaries of $2,800.Oregon recorded all appropriate year-end adjustments.
1)What would Oregon report for service revenue for Year 1?2)What would Oregon report for salaries expense for Year 1?3)What would the amount be for net cash flows from operating activities for Year 1?4)What is the net income for Year 1?5)What would the balance in the retained earnings account be at December 31, Year 1?

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Definitions:

Apparent Authority

The appearance or impression of authority given by a principal to an agent, leading others to believe the agent has actual authority.

Termination Notice

A formal declaration that a contract, employment, or agreement is ending, often specifying the effective date and conditions of termination.

Actual Notification

For third parties who have previously dealt with the agent or who have begun to deal with the agent. This can be accomplished by (1) a direct personal statement to the third party or (2) a writing delivered to the third party personally, to his place of business, or to some other place reasonably believed to be appropriate.

Agency Termination

The process by which the relationship between a principal and their agent is ended, which could be due to expiration, mutual agreement, or other reasons.