Avenue Company was formed and began business on January 1, 2019, when R. B. Street transferred merchandise inventory with a value of $60,000, cash of $55,000, accounts receivable of $60,000, and accounts payable of $35,000. Common stock with a par value of $5 per share was issued to Mr. Street. The company€™s common stock was recorded at par. Avenue Company€™s statement of cash flows for 2019 is shown below:

INSTRUCTIONS
Based on the data supplied, prepare the December 31, 2019, balance sheet for the corporation.

Analyze: Describe four adjusting entries that were made by Avenue Company in fiscal 2019.

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Avenue Company Statement of Cash Flows Year Ended December 31, 2019 Cash Flow from Operations Net Income |Adjustments Depreciation of building 50000 5000 6000 (15000 8000) (800, 17000 2500 Depreciation of equipment Increase in accounts receivable Increase in inventory Increase in prepaid insurance Increase in accounts payable Increase in income tax payable Net cash flow provided by operations 6700 56700 Cash Flow from Investing Activities Purchase of land Purchase of building Purchase of equipment Net cash used in investing activities 60000 25000 6 0000 |(1 15000) Cash Flow from Financing Activities Issuance of common stock at $5/share 5000 40000 Borrowing at bank by issuance of note payable Net cash provided by financing activities Net decrease in cash balance Cash balance, January 1, 2019 Cash balance, December 31, 2019 45000 13300 55000 4 1700