ABLE ALT-EZ-CASH FLOW CASH F T I F ACCOUNTS RECEIVABLE LAND ACCOUNTS PAYABLE COMMON STOCK RETAINED EARNINGS EQUIPMENT ACCUM. DEPR. EQUIP. DEBIT CREDIT EXPENSES SERVICE REVENUE DEPRECIATION EXPENSE GAIN ON DISPOSAL TRANSACTIONS 1 Walden Corporation issued 100,000 shares of $5.00 par value common stock at par. 2 Walden purchased Land in the amount of $20,000, paying cash. 3 Waldon purchased equipment in the amount of $38,000, paying cash. 4 Walden earned revenue of $70,000, receiving $15,000 in cash, and the rest $55,000 on account. 5 Walden incurred expenses of $45,000, paying $32,000 in cash and the rest, $13,000, on account. 6 Walden sold 1/4 of the land for $8,000, making a gain on disposal. 7 Walden recorded depreciation on the equipment in the amount of $3,800. 8 The accounts were closed: SERVICE REVENUE GAIN ON DISPOSAL XXX XXX EXPENSES XXX DEPRECIATION EXPENSE XXX RETAINED EARNINGS XXX CASH FLOW STATEMENT--INDIRECT METHOD--OBSERVE SIGNS NET INCOME + DEPRECIATION EXPENSE 9 Walden Corp declared and paid a cash dividend of $5,000. 27 28 29 30 CASH 31 ACCOUNTS RECEIVABLE 32 LAND 33 EQUIPMENT 34 ACCUM. DEPR EQUIP. 35 ACCOUNTS PAYABLE 36 COMMON STOCK 37 RETAINED EARNINGS 38 SERVICE REVENUE 39 EXPENSES 40 DEPRECIATION EXPENSE 41 GAIN ON DISPOSAL 42 TOTALS 43 DEBIT CREDIT 0 0 DEPRECIATION EXPENSE RETAINED EARNINGS XXX XXX CASH FLOW STATEMENT--INDIRECT METHOD--OBSERVE SIGNS NET INCOME + DEPRECIATION EXPENSE -INCREASE IN ACCOUNTS RECEIVABLE +INCREASE IN ACCOUNTS PAYABLE 9 Walden Corp declared and paid a cash dividend of $5,000. -GAIN ON DISPOSAL =CASH FLOW FROM OPERATIONS -PURCHASE OF EQUIPMENT -PURCHASE OF LAND +SALE OF LAND = CASH FLOW FROM INVESTING +ISSUANCE OF COMMON STOCK -PAYMENT OF DIVIDEND =CASH FLOW FROM FINANCING 44 The trial balance is generated automatically from 45 the T-accounts. 46 NET CASH FLOW 47 48 +BEGINNING BALANCE OF CASH =ENDING BALANCE OF CASH 0 0 49 50 Automated sum Automated sum Automated sum Hint: this figure should match ending balance of cash