The following transactions took place during the first year of business for ABC Company. (Dollars given are in millions, use the numbers as shown, but make a note on your statements that the dollars are in millions). The firms year end is June 30.

1. Issued ABC stock (received contribution from owners) in the amount of $250
2. Borrowed $850 from a local bank with a 6-year note (ignore interest expense)
3. Purchased land for $650 cash
4. Paid $25 for operating expenses
5. Purchased new equipment for cash of $300
6. Collected $800 from customers for services provided
7. Paid salaries to employees of $480
8. Purchased supplied for $20 on account, to be used in the coming year
9. Paid dividends to new shareholders of $5

Question:

1. Set up an accounting equation worksheet and record each transaction on the worksheet. (Record the equipment purchase as an asset and ignore the fact that the equipment was probably used during the year. Also, ignore the interest expense on the bank note).

2. Prepare the four basic financial statements from the worksheet.