On January 1, 2018, Jana started a small flower merchandising business that she named Janas Flowers. The company experienced the following events during the first year of operation:

1.Started the business by issuing common stock for $30,000 cash.

2.Paid $19,000 cash to purchase inventory.

3.Sold merchandise that cost $10,000 for $21,000 on account.

4.Collected $16,000 cash from accounts receivable.

5.Paid $3,750 for operating expenses.

Required

a. Organize ledger accounts under an accounting equation and record the events in the accounts. In the last column of the table, provide appropriate account titles for the Retained Earnings amounts.

b-1. Prepare an income statement.

b-2. Prepare a balance sheet.

b-3.Prepare a statement of cash flows.

c. Since Jana sold inventory for $21,000, she will be able to recover more than half of the $30,000 she invested in the stock. Do you agree with this statement?

Organize ledger accounts under an accounting equation and record the events in the accounts. In the last column of the table, provide appropriate account titles for the Retained Earnings amounts. (Select "NA" if there is no effect on the "Accounts Titles for Retained Earnings". Enter any decreases to account balances with a minus sign.)

JANA'S FLOWERS
Effect of Events on the Accounting Equation
Event	Assets					=	Stockholders Equity			Accounts Titles for Retained Earnings
	Cash	+	Accounts Receivable	+	Inventory	=	Common Stock	+	Retained Earnings
1.		+		+		=		+
2.		+		+		=		+
3a.		+		+		=		+
3b.		+		+		=		+
4.		+		+		=		+
5.		+		+		=		+
Total		+		+		=		+

JANA'S FLOWERS
Income Statement
For the Year Ended December 31, 2018
Cost of goods sold
Gross margin
Operating expenses
Net income

Prepare a balance shee

Prepare a balance sheet.

JANA'S FLOWERS
Balance Sheet
As of December 31, 2018
Assets
Cash
Merchandise inventory
Accounts receivable
Total assets
Liabilities
Stockholders' Equity
Common stock
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity

Prepare a statement of cash flows. (Amounts to be deducted should be indicated with a minus sign.)

JANA'S FLOWERS
Statement of Cash Flows
For the Year Ending December 31, 2018
Cash flows from operating activities
Cash inflow from stock issue
Net cash flow from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net cash flows from financing activities
Net change in cash
Plus: Beginning cash balance
Ending cash balance