Required information Mark's Consulting experienced the following transactions for Year 1, its first year of operations, and Year 2. Assume that all transactions involve the receipt or payment of cash. Transactions for Year 1 1. Acquired $20,000 by issuing common stock 2. Received $35,000 for providing services to customers. 3. Borrowed $25,000 cash from creditors. 4. Paid expenses amounting to $22,000. 5. Purchased land for $30,000 cash. Transactions for Year 2 Beginning account balances for Year 2 are: Cash Land Notes payable Common stock Retained earnings $28,000 30,000 25,000 20,000 13, 000 1. Acquired an additional $24,000 from the issue of common stock 2. Received $95,000 for providing services in Year 2 3. Paid $15,000 to reduce notes payable. 4. Paid expenses amounting to $71,500. 5. Paid a $3,000 dividend to the stockholders 6. Determined that the market value of the land is $47,000 Required a. Record the effects of each accounting event under the appropriate headings for each year Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide appropriate titles for these accounts in the last column of the table. (Enter any decreases to account balances with a minus sign. Not all cells in the "Accounts Titles for Retained Earnings" column may require an input- leave cells blank if there is no corresponding Retained Earnings input needed.) MARK'S CONSULTING Accounting Equation for Year Assets Liabilities Notes Stockholders' Equity Common Stock Account Titles for Event Retained Earnings Retained Earnings Cash Land Payable 1. 2. 3 4. 5 0 0 Totals MARK'S CONSULTING Accounting Equation for Year 2 Liabilities Assets Stockholders' Equity Common + Account Titles for Retained Earnings Event Notes Retained Cash Land Payable Stock Earnings Beg bal. 1 2. 3. 4 5. 6 Totals 01+ 0 0 b-1. Prepare an income statement for Year 1 and Year 2 MARK'S CONSULTING Income Statement For the Period Ended December 31, Year 1 &Year 2 Year 1 Year 2 0$ $ 0 b-2. Prepare a statement of changes in stockholders' equity for Year 1 and Year 2 MARK'S CONSULTING Statement of Changes in Stockholders' Equity For the Period Ended December 31, Year 1 & Year 2 Year 2 Year 1 Beginning common stock Plus: Common stock issued Ending common stock Beginning retained earnings Plus: Net income Less: Dividends $ 0 Ending retained earnings Total stockholders' equity $ 0 0 $ | b-3. Prepare a year-end balance sheet for Year 1 and Year 2 MARK'S CONSULTING Balance Sheet December 31, Year 1 & Year 2 Year 1 Year 2 Assets Total assets 0$ $ 0 Total liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity 0 0 $ MARK'S CONSULTING Statement of Cash Flows For the Year Ended December 31, Year 1 & Year 2 Year 2 Year 1 Cash flows from operating activities Net cash flow from operating activities Cash flows from investing activities Net cash flow from investing activities Cash flows from financing activities Net cash flow from financing activities Ending cash balance 0 c. Determine the amount of cash in the retained earnings account at the end of Year 1 and Year 2. Year 1 Year 2 Retained earnings
