Smith Consulting Company started the period with cash of $29,000, common stock of $15,000, and retained earnings of $14,000. Smith engaged in the following transactions in 2020:

Transactions during 2020

1. On January 1, 2020, purchased office furniture for $14,000. 2. On March 1, paid $6,000 for an insurance policy that provides coverage for 12 months beginning immediately. 3. Purchased $2,000 of supplies for cash. 4. Provided $41,000 of services for cash. 5. Paid $9,200 for salaries expense. 6. On April 1, received $14,000 for services that will be performed over the next 12 months beginning immediately.

Information for Adjusting Entries

7. The furniture had an estimated life of six years and a $2,000 salvage value. 8. Recognized the expired insurance. 9. An inventory of supplies showed $350 of supplies on hand as of December 31. 10. Recognized the revenue associated with Event 6 as of December 31.

7. Statement of Cash Flows

8. Ratio calculations with brief discussion