1.6 Accounting Equation and Financial Statements

Background Information:The New Life Dance Company experienced the following events during 2019:

1 Acquired $40,000 cash from the issue of common stock

2 Paid $15,000 cash to purchase land

3 Borrowed $8,000 in cash

4 Paid $1,500 cash for utilities expense

5 Provided ballet services for $25,000 cash

6 Paid $17,000 cash for other operating expenses

7 Paid $3,200 cash dividend to the stockholders

8 Determined that the market value of the land purchase is now only $15,000

Note:There are drop downs for the Income Statement and Balance Sheet for the labels.

a) Complete the accounting equation for the different transactions. The starting balances from January 1 have been included.Once you have completed this,

you will have the needed information to complete the Income Statement and Balance Sheet Below.

The New Life Dance Company

Accounting Equation

Event Assets Liabilities Stockholders Equity

Cash + Land = Notes Payable + Common Stock + Retained Earnings

Balance $3,000 $15,000 $9,000 $9,000

1

2

3

4

5

6

7

8

Total $3,000 + $15,000 = $- + $9,000 + $9,000

CELLS C 32, E32, G32, I32, AND K32 ARE FORMULAS, PLEASE DO NOT CHANGE

b) Prepare an income statement for 2019

New Life Dance Company

Income Statement

For the Year Ended December 31,2019

Income statement equation:

Revenue minus expenses = profit (loss)

Net Income $-

CELL E45 IS A FORMULA, PLEASE DO NOT CHANGE