QUESTION 6

Tesla experienced the following events during its first-year operations:

1. Acquired $680,000 cash from the issue of common stock.

2. Borrowed $210,000 from the First City Bank.

3. Paid a $72,000 cash dividend.

4. Paid $410,000 to purchase land.

5. Incurred $400,000 of cash expenses.

6. Earned $660,000 of cash revenue.

Required

A. Identify the events that will affect the income statement.

B. Prepare an income statement that shows the results of Year 1 operations.

C. What account on the left side of the accounting equation increased when the revenue account increased?