Part 1: Effect of transactions on the Financial Statements

Consider the effects of the independent transactions, a through k, on a companys balance sheet, income statement, statement of cash flows, and statement of stockholders equity.

1. Stock was issued to stockholders for cash
2. Company borrowed funds from a financial institution.
3. Company purchased equipment with cash.
4. Services were performed for cash.
5. Supplies were purchased on credit.
6. Wages were accrued at the end of the period.
7. Rent was paid in cash.
8. Supplies inventory was adjusted for items used
9. Company paid interest on debt
10. Company made a principle payment on debt
11. Stockholders were paid a cash dividend

Complete the table on the next page to explain the effects and financial statement linkages. Use + to indicate the account increases and to indicate the account decreases.

	a.	b.	c.	d.	e.	f.	g.	h.	i.	j.	k.
Balance sheet
Cash
Noncash assets
Total liabilities
Contributed capital
Retained earnings
Other equity
Statement of cash flows
Operating cash flow
Investing cash flow
Financing cash flow
Income statement
Revenues
Expenses
Net earnings
Statement of stockholders equity
Contributed capital
Retained earnings