Check My work Every transaction affects (increases or decreases) one or more of the balance sheet elements-assets, liabilities, or stockholders' equity. 3. Prenare an income atatement for lul. Feedlack Theck My work An income statement reports revenues and expenses. When the revenues are larger than the expenses, the difference is net income. Prepare a statement of stockholders' equity for July. If your answer is zero enter " 0 ". Feedlack Check My Work Recall that the net income on the income statement must be equal to the net effects of revenues and expenses on retained earnings. Therefore, beginning retained earnings plus net income less dividends is equal to ending retained earnings. Transactions and Financial Statements Roger Smith established an insurance agency on July 1, 20Y5, and completed the following transactions during July: a. Opened a business bank account in the name of Smith Insurance Inc.r with a deposit of $49,000 in exchange for common stock. b. Borrowed $24,500 by issuing a note payable. c. Received cash from fees earned, $28,000. d. Paid rent on office and equipment for the month, $3,500. e. Paid automobile expense for the month, $1,700, and miscellaneous expense, $600. f. Paid office salaries, $4,100. g. Paid interest on the note payable, $100. h. Purchased land as a future building site, paying cash of $56,000. i. Paid dividends, $4,500. Instructions: 1. Indicate the effect of each transaction and the balances after each transaction, using the integrated financial statement framework. After all transactions are recorded, enter Net income under the Income Statement column. If an amount box does not require an entry, leave it blank. Enter account decreases and net cash outflows as negative amounts using the minus sign. 4. Prepare a balance sheet as of July 31,20Y5. Smith Insurance Inc. Feedback V Check My work Recall that the balance sheet is a formal representation of the accounting equation, such that total assets must equal the sum of total liabilities and stockholders' equity. Assets are items owned by the company, while liabilities are debts owed to creditors and stockholders' equity represents the rights o the shareholders. 5. Prepare a statement of cash flows for July. Use the minus sign to indicate cash outflows, decreases in cash, or cash payments. if your answer is zero enter "0" Feedlack T Check My work Recall that there are three types of cash flows: operating activities, investing activities, and financing activities, Increases to Cash result from receiving cash for services, selling assets, and shareholder investments in the company. Decreases to Cash result from paying expenses, payments made on accol and the payment of dividends