McColley Corporation, a new company created by one of your friends, comes to you to get help understanding their nancial situation. A bank has asked them to tell them about their nancial position. McColley had the following transactions during the most recent period. Using the table below, summarize the eects of each transaction on McColleys nancial position by indicating dollar amounts and using positive and negative numbers to indicate increases or decreases.

(all amounts in $000)

Assets

Liabilities

Equity

Beginning balances

0

0

0

Issued stock to investors for $1,000

Bought oce equipment for $50 cash

Paid salaries to employees for $80

Paid $100 cash for rent

Provided consulting services to clients worth $200 on account

Bought oce supplies on account $10

Used up oce supplies worth $5

Recorded depreciation expense of $5

Recorded estimated uncollectible accounts of $10

Borrowed $100 from Medetbekova Bank & Trust. (ignore interest)

Collected $100 in cash from customers.

Ending balances

Briey describe McColleys nancial position based on your analysis above.

2

TWO

A. Using the list of transactions to date from problem ONE above, prepare an

income statement in good form for McColley. B. Prepare a statement of cash ows for McColley for the period to date using the

indirect method to determine cash ows from operating activities. C. Prepare a statement of cash ows for McColley for the period to date using the

direct method to determine cash ows from operating activities.

ONE McColley Corporation, a new company created by one of your friends, comes to you to get help understanding their financial situation. A bank has asked them to tell them about their "financial position." McColley had the following transactions during the mast recent period. Using the table below, summarize the effects of each transaction on McColley's financial position by indicating dollar amounts and using positive and negative numbers to indicate increases or decreases. Briefly describe McColley's financial position based on your analysis above. 2 TWO A. Using the list of transactions to date from problem ONE above, prepare an income statement in good form for McColley. B. Prepare a statement of cash flows for McColley for the period to date usng the indirect method to determine cash flows from operating activities. C. Prepare a statement of cash flows for McColley for the period to date ustng the dinect method to determine cash flows from operating activities