On January 1, Year 1, Jana started a small flower merchandisingbusiness that she named Jana?s Flowers. The company experienced thefollowing events during the first year of operation:

1. Started the business by issuing common stock for $18,000cash.

2. Paid $12,000 cash to purchase inventory.

3. Sold merchandise that cost $9,000 for $19,000 on account.

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

5. Paid $4,500 for operating expenses.

Required

1. a. Organize ledger accounts under anaccounting equation and record the events in the accounts. Inthe last column of the table, provide appropriate account titlesfor the Retained Earnings amounts.

2. b-1. Prepare an income statement.

3. b-2. Prepare a balance sheet.

4. b-3. Prepare a statement of cashflows.

5. c. Since Jana sold inventory for $19,000,she will be able to recover more than half of the $18,000 sheinvested in the stock. Do you agree with this statement?

Req A Event 1. 2. 3a. 3b. 4. 5. Total Req B1 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. (If there is no effect on the Account Titles for Retained Earnings, leave the cell blank. Not all cells will require input. Enter any decreases to account balances with a minus sign.) Cash + + + + + + + Req B2 0 + Assets Accounts Receivable JANA S FLOWERS Effect of Events on the Accounting Equation + Inventory + + + + + Req B3 + 0+ = = = = Req C 0 = Stockholders Equity Retained Earnings Common Stock + + + + + + 0 + 0 Accounts Titles for Retained Earnings Req A Req B1 Prepare an income statement. Req B2 JANA S FLOWERS Income Statement For the Year Ended December 31, Year 1 Req B3 Req C Req A Req B1 Prepare a balance sheet. Assets Total assets Liabilities Stockholders Equity Req B2 JANA S FLOWERS Balance Sheet As of December 31, Year 1 Total stockholders equity Total liabilities and stockholders equity Req B3 $ $ Req C 0 0 0 Req A Req B1 Req B2 Cash flows from operating activities: Prepare a statement of cash flows. (Cash outflows should be indicated with a minus sign.) JANA S FLOWERS Statement of Cash Flows For the Year Ending December 31, Year 1 Req B3 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 $ Req C $ 0 0 0 0 Req A Req B1 Req B2 Req B3 Req C Since Jana sold inventory for $19,000, she will be able to recover more than half of the $18,000 she invested in the stock. Do you agree with this statement? Do you agree with this statement? < Req B3 Req C >