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P2.22 Smith & Co. experienced the following six events in its first year of operations: 1. Shareholders contributed $60,000 cash. 2. Purchased land for $40,000

P2.22
Smith & Co. experienced the following six events in its first year of operations:
1. Shareholders contributed $60,000 cash.
2. Purchased land for $40,000 cash.
3. Borrowed $18,000 in cash from a bank.
4. Provided services for $16,000, which will be paid to Smith & Co. next year.
5. Paid $11,000 cash for miscellaneous operating expenses.
6. Paid a $1,000 cash dividend to shareholders.
Smith & Co.
Transaction: 1 2 3 4 5 6 Totals
Assets
Cash
Accounts receivable
Land
Total assets
Liabilities
Loan Payable
Total liabilities
Shareholders' equity
Common stock
Retained earnings
Revenue
Operating expense
Dividends
Total shareholders equity
SMITH & CO. INCOME STATEMENT STATEMENT OF RETAINED EARNINGS
REVENUE BEG. RET. EARNINGS
NET INCOME
OPERATING EXPENSES DIVIDENDS
ENDING RET. EARNINGS
NET INCOME
BALANCE SHEET Smith & Co. Statement of Cash Flows
For Year 1
ASSETS Operating activities
Cash Cash flow from Ops Hint: First year so net income / loss
Acc. Receivable
Land Investing activities
TOTAL ASSETS Cash flow from Invest
LIABILITIES Financing activities
Loan Payable Bank loan
Common stock
EQUITY Dividend payment
Common Stock Cash flow from Fin
Retained Earnings
Change in cash
TOTAL LIAB. AND EQUITY Cash, beginning of year 0.00
Cash, end of year

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