On January 1, Year 1, Jana started a small flower merchandising business that she named Jana's Flowers. The company experienced the following events during the first year of operation: 1. Started the business by issuing common stock for $15,000 cash. 2. Paid $10,000 cash to purchase inventory. 3. Sold merchandise that cost $7,000 for $15,000 on account. 4. Collected $12,000 cash from accounts receivable. 5. Paid $3,500 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 $15,000, she will be able to recover more than half of the $15,000 she invested in the stock. Do you agree with this statement?

On January 1, Year 1, Jana started a small flower merchandising business that she named Jana's Flowers, The company experienced the following events during the first year of operation: 1. Started the business by issuing common stock for $15,000 cash. 2. Paid $10,000 cash to purchase inventory. 3. Sold merchandise that cost $7,000 for $15,000 on account. 4. Collected $12,000 cash from accounts receivable. 5. Paid $3,500 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 $15,000, she will be able to recover more than half of the $15,000 she invested in the stock. Do you agree with this statement? JANA'S FLOWERS Effect of Events on the Accounting Equation