Adams & Co. experienced the following six events in its first year of operations:

1. Shareholders contributed $60,000 cash.

2. Purchased land for $30,000 cash.

3. Borrowed $18,000 in cash from a bank.

4. Provided services for $15,000, which will be paid to Smith & Co. next year.

5. Paid $11,000 cash for miscellaneous operating expenses.

6. Paid a $1,000 cash dividend to shareholders.

Required
(a) Using the balance sheet equation as illustrated in this chapter, identify how each of the above six events affected the various accounts involved. Prepare an (b) income statement, (c) a statement of shareholders’ equity, (d) a balance sheet, and (e ) a statement of cash flow for the first year of operations.

(a) Hint - Make sure to enter each expense item as a negative amount for this worksheet.

Adams & Co.
Transaction:	1	2	3	4	5	6	Balance sheet
Assets
Cash
Accounts receivable
Land
Total assets
Liabilities
Loan Payable
Total liabilities
Shareholders' equity
Common stock
Retained earnings
Revenue
Operating expense
Dividends
Total shareholders equity

(b) Do not use a negative sign with your answers below.

Adams & Co. Income Statement For Year 1
Revenue
Operating expenses
Net Income

(c)

Adams & Co. Statement of Stockholders Equity For Year 1
	Common Stock	Retained Earnings	Total
Beginning balance
Net income
Dividends(enter as negative)
Stock sales
Balance at year-end

(d)

Adams & Co. Balance Sheet At End of Year 1
Assets			Liabilities
Cash			Loan payable
Accounts receivable			Total liabilities
Land
			Shareholders' equity
			Common stock
			Retained earnings
			Total shareholders equity
Total assets			Total liabilities and shareholders equity

(e) Use a negative sign with answers to indicate a decrease in cash.

Adams & Co. Statement of Cash Flows For Year 1
Operating activities
Cash flow from operations
Investing activities
Cash flow from investing
Financing activities
Bank loan
Common stock
Dividend payment
Cash flow from financing
Change in cash
Cash, beginning of year
Cash, end of year