On the following pages, show your solution to the following problems.

1. Analyze and record the above transactions.

2. Prepare the following financial statements: () Income Statement, (ii) Balance Sheet, and ( iii) Statement of Cash Flows using both the Direct and Indirect method

The following transactions occurred during January 2014:

Jan.

1) Borrowed $10,000, signing a 5 year, 12% note payable

2) Sold $ 2,000 worth of pasta to customers for $3,500 cash

4) Received an invoice for $150 from the Spaghetti Times for an advertisement to appear in the February 2014 issue.

8) Sold $2,800 pasta for $ 5,000 to customers on account .

9) Purchased pasta on account from manufacturer for $ 9,500 .

13) Received $ 4,000 from customers on account .

16) Paid $ 800 to the owner of the manufacturing facility for February rent

18) Paid a cash dividend of $ 1,000 to shareholders .

20) Purchased equipment for $5,500 cash

21) Paid suppliers $ 2,500 the balance due .

31) Paid salaries , $ 1,750 . Employees are paid once a month on the last day of the month

Ricardo Pasta Company sells various types of pasta to grocery chains as private label brands. The trial balance for the company's fiscal year end December 31, 2013 is as follows: Ricardo Pasta Company sells various types of pasta to grocery chains as private label brands. The trial balance for the company's fiscal year end December 31, 2013 is as follows