Ed's Lawn Service entered into the following transaction during 2012, its first year of operations: 1. Collected
Question:
Ed's Lawn Service entered into the following transaction during 2012, its first year of operations:
1. Collected $12,000 in cash in cash from shareholders.
2. Borrowed $5,000 from a bank.
3. Purchased two parcels of land for a total $10,000.
4. Paid $5,000 to rent lawn equipment for the remainder of the year.
5. Provided lawn services, receiving $10,000 in cash and $4,000 in receivables.
6. Paid miscellaneous expenses of $4,000.
7. Sold one parcel of land with a cost of $3,000 for $2,800.
8. Paid a $2,200 dividend to the shareholders.
a. In a manner similar to Figure show how each transaction affected the fundamental accounting equation and prepare an income statement, a statement of shareholders' equity, a year-end balance sheet, and a statement of cash flows for 2012.
b. Journalize each transaction and post it in the appropriate T-accounts. From this information, prepare a year-end balance sheet, an income statement, a statement of shareholders' equity, and a statement of cash flows for2012.
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
a Assets Liabilities Stockholders Equity Accounts Notes Contributed Retained Cash Receivable Land Payable Capital Earnings 1 12000 12000 2 5000 5000 3 10000 10000 4 5000 5000 5 10000 4000 14000 6 4000 ...View the full answer
