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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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