A - N O 0 R S T 1 2 3 B C D E F G H M CASH FLOW PROBLEM CLOSING: Make entries in the green sections of the ledger. When complete, construct a cash flow statement using guide below. Use a minus-sign to indicate cash outflows. CASH ACCOUNTS PAYABLE COMMON STOCK RETAINED EARNINGS SERVICE REVENUE 46,000 EXPENSES DEPRECIATION EXP RETAINED EARNINGS 30,000 1,500 14,500 4 5 6 7 8 9 NOTES PAYABLE EXPENSES SERVICE REVENUE ACCOUNTS RECEIVABLE DEPRECIATION EXPENSE GAIN ON DISPOSAL LAND 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 POST to T-Accounts: 1. Johnson Corporation issued 100,000 shares of $1 par common stock and received cash of $100,000. 2. Johnson Corporation purchased equipment for $32,000, paying cash. 3. Johnson earned revenue of $46,000, one half in cash, the other half on account. ACCUM. DEPR. EQUIP. 4. Johnson incurred expenses of $30,000, paying one-half in cash; the rest was on account. 5. Depreciation is $1,500 on the equipment. 6. CLOSING: see entries to the right, to close revenues and expenses to Retained Earnings. See entries in RED above. 7. Johnson declared and paid a dividend of $3000 in cash to stockholders. Debit Retained Earnings, credit Cash. EQUIPMENT