C2H1

The Ramires, Incorporated experienced the following events during its first year of operations, Year 1:

1.Acquired $56,000 cash by issuing common stock

2.Earned $52,000 cash revenue

3.Paid $27,000 cash for operating expenses

4.Borrowed $15,000 cash from the bank

5.Paid $40,000 cash to purchase land

6. Paid a $1000 cash dividend

a. Show the effects of the events on the financial statements using a horizontal statements model like the following one. In the cash flow column, Use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is recorded as an example.

B. Prepare a formal income statement, statement of changes in stockholders equity, balance sheet, and statement of cash flows.

uired B Stkholder E activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is recorded Flows No. 56,000 FA