TRANSACTIONS 1 Walden Corporation issued 100,000 shares of $5.00 par value common stock at par. ALT-EZ-CASH FLOW 2 Walden purchased Land in the amount of $20,000, paying cash. CASH ACCOUNTS PAYABLE COMMON STOCK RETAINED EARNINGS F 3 Waldon purchased equipment in the amount of $38,000, paying cash. I o F EXPENSES SERVICE REVENUE 4 Walden earned revenue of $70,000, receiving $15,000 in cash, and the rest $55,000 on account. ACCOUNTS RECEIVABLE 5 Walden incurred expenses of $45,000, paying $32,000 in cash and the rest, $13,000, on account DEPRECIATION EXPENSE GAIN ON DISPOSAL 6 Walden sold 1/4 of the land for $8,000, making a gain on disposal. LAND 7 Walden recorded depreciation on the equipment in the amount of $3,800. EQUIPMENT ACCUM. DEPR EQUIP. 8 The accounts were closed: SERVICE REVENUE XXX GAIN ON DISPOSAL XXX EXPENSES XXX DEPRECIATION EXPENSE XXX RETAINED EARNINGS XXX DEBIT CREDIT CASH FLOW STATEMENT--INDIRECT METHOD--OBSERVE SIGNS NET INCOME + DEPRECIATION EXPENSE 9 Walden Corp declared and paid a cash dividend of $5,000. ABLE 27 XXX DEPRECIATION EXPENSE RETAINED EARNINGS 28 XXX 29 DEBIT CREDIT 30 CASH 31 ACCOUNTS RECEIVABLE 32 LAND 9 Walden Corp declared and paid a cash dividend of $5,000. CASH FLOW STATEMENT--INDIRECT METHOD--OBSERVE SIGNS NET INCOME + DEPRECIATION EXPENSE -INCREASE IN ACCOUNTS RECEIVABLE +INCREASE IN ACCOUNTS PAYABLE -GAIN ON DISPOSAL = CASH FLOW FROM OPERATIONS Automated sum 33 EQUIPMENT 34 ACCUM. DEPR EQUIP 35 ACCOUNTS PAYABLE 36 COMMON STOCK 37 RETAINED EARNINGS 38 SERVICE REVENUE 39 EXPENSES 40 DEPRECIATION EXPENSE 41 GAIN ON DISPOSAL 42 TOTALS 0 0 43 44 The trial balance is generated automatically from 45 the T-accounts. -PURCHASE OF EQUIPMENT -PURCHASE OF LAND + SALE OF LAND = CASH FLOW FROM INVESTING 0 Automated sum +ISSUANCE OF COMMON STOCK -PAYMENT OF DIVIDEND =CASH FLOW FROM FINANCING Automated sum 46 NET CASH FLOW +BEGINNING BALANCE OF CASH =ENDING BALANCE OF CASH DOO 47 48 Hint: this figure should match ending balance of cash. 49 50