Magic Enterprises borrowed \(\$ 18,000\) from a local bank on July 1, 2011, when the company was started. The note had a 10 percent annual interest rate and a one-year term to maturity. Magic Enterprises recognized \(\$ 42,500\) of revenue on account in 2011 and \(\$ 45,000\) of revenue on account in 2012. Cash collections of accounts receivable were \(\$ 36,000\) in 2011 and \(\$ 35,000\) in 2012. Magic paid \(\$ 24,000\) of other operating expenses in 2011 and \(\$ 28,000\) of other operating expenses in 2012. Repaid the loan and interest at the maturity date.

Required
Based on this information, answer the following questions. (Record the events in the accounting equation before answering the questions.)

a. What amount of interest expense would Magic report on the 2011 income statement?

b. What amount of net cash flow from operating activities would Magic report on the 2011 statement of cash flows?

c. What amount of total liabilities would Magic report on the December 31, 2011, balance sheet?

d. What amount of retained earnings would Magic report on the December 31, 2011, balance sheet?

e. What amount of net cash flow from financing activities would Magic report on the 2011 statement of cash flows?

f. What amount of interest expense would Magic report on the 2012 income statement?

g. What amount of net cash flow from operating activities would Magic report on the 2012 statement of cash flows?

h. What amount of total assets would Magic report on the December 31, 2012, balance sheet?

i. What amount of net cash flow from investing activities would Magic report on the 2012 statement of cash flows?

j. If Magic Enterprises paid a \(\$ 1,500\) dividend during 2012, what retained earnings balance would it report on the December 31, 2012, balance sheet?