Dakota Company experienced the following events during Year 2: 1. Acquired $20,000 cash from the issue of common stock. 2. Paid $22,500 cash to purchase land. 3. Borrowed $8,000 cash. 4. Provided services for $30,000 cash. 5. Paid $2,000 cash for utilities expense. 6. Paid $20,000 cash for other operating expenses. 7. Paid a $1,000 cash dividend to the stockholders. 8. Determined that the market value of the land purchased in Event 2 is now $25,000. Required a. The January 1, Year 2, account balances are shown in the following accounting equation. Record the eight events in the appropriate accounts under an accounting equation. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table. The first event is shown as an example. b-1. Prepare an income statement for the Year 2 accounting period. b-2. Prepare a statement of changes in equity for the Year 2 accounting period. b-3. Prepare a year-end balance sheet for the Year 2 accounting period. b-4. Prepare a statement of cash flows for the Year 2 accounting period. c-1. Determine the percentage of assets that were provided by retained earnings. c-2. Does the retained earning balance reflect the amount of cash that the company has available to pay dividends? d. Based on the December 31, Year 2, balance sheet, what is the largest cash dividend Dakota could pay? DAKOTA COMPANY Accounting Equation for Year 2 Assets Liabilities + Stockholders' Equity Event Cash Notes + Land Common Retained Payable Stock Earnings Account Titles for Retained Earnings Balance 1/1/Year 2 10,000+ 22,500 = 0+ 15,000+ 17,500 1. 20,000+ + 20,000- 2. (22,500)+ 22,500 = 3. 8,000+ = 8,000 4. 30,000+ = 5. (2,000) + 6. (20,000) 7. (1,000)+ + 30,000 Service revenue (2,000) Utilities expense (20,000) Operating expense (1,000) Dividends 8. Totals 22,500+ ++ + 45,000 = 8,000+ 35,000+ 24,500 Prepare an income statement for the Year 2 accounting period. DAKOTA COMPANY Income Statement For the Year Ended December 31, Year 2 Accounts receivable $ 30,000 Common stock (2,000) Cash (1,000) Accounts payable (20,000) EA $ 7,000 Prepare a statement of changes in equity for the Year 2 accounting period. DAKOTA COMPANY Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 Beginning common stock $ 15,000 Plus: Common stock issued 20,000 Ending common stock $ 35,000 Beginning retained earnings $ 17,500 Plus: Net income 24,500 Less: Dividends 1,000 Ending retained earnings Total stockholders' equity 41,000 $ 76,000 Prepare a year-end balance sheet for the Year 2 accounting period. Assets DAKOTA COMPANY Balance Sheet As of December 31, Year 2 Total assets Liabilities Total liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity 69 $ $ 0 0 0 1 Prepare a statement of cash flows for the Year 2 accounting period. (Amounts to be deducted should be indicated wit minus sign.) DAKOTA COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 5 Cash flows from operating activities: Net cash flow from operating activities Cash flows from investing activities: Net cash flow from investing activities Cash flows from financing activities: Net cash flow from financing activities Ending cash balance $ 0 0 0 $ 0 es c-1. Determine the percentage of assets that were provided by retained earnings. (Round your answer to 1 decimal place (1.e., 0.234 should be entered as 23.4).) c-2. Does the retained earning balance reflect the amount of cash that the company has available to pay dividends? d. Based on the December 31, Year 2, balance sheet, what is the largest cash dividend Dakota could pay? c-1. Percentage of assets c-2. Does the retained earning balance reflect the cash for dividends? d. Cash dividend % Show less A