Transactions and Financial Statements Roger Smith established an insurance agency on July 1, 2045, and completed the following transactions during July: a. Opened a business bank account in the name of Smith Insurance Inc., with a deposit of $48,500 in exchange for common stock. b. Borrowed $25,000 by issuing a note payable. c. Received cash from fees earned, $28,500. d. Paid rent on office and equipment for the month, $3,400. e. Paid automobile expense for the month, $1,900, and miscellaneous expense, $800. f. Paid office salaries, $4,200. g. Paid interest on the note payable, $100. h. Purchased land as a future building site, paying cash of $58,500. i. Paid dividends, $3,800. Instructions: 1. Indicate the effect of each transaction and the balances after each transaction, using the integrated financial statement framework. After all transactions are recorded, enter Net income under the Income Statement column. If an amount box does not require an entry, leave it blank. Enter account decreases and net cash outflows as negative amounts using the minus sign. Balance Sheet Assets Liabilities + Stockholders' Equity Transaction Cash Land = Notes Payable Common Stock Retained Earnings a. Issued common stock 48,500 b. Issued note payable 25,000 Balances C. Fees earned 28,500 Balances d. Rent expense 3,400 x Balances e. Paid expenses 2,800 X Balances f. Paid salary expense 4,200 X 5. Prepare a statement of cash flows for July. Use the minus sign to indicate cash outflows, decreases in cash, or cash payments. if your answer is zero enter "0". Smith Insurance Inc. Statement of Cash Flows For the Month Ending July 31, 2015 Cash flows from (used for) operating activities: Cash received from operating activities Cash paid for operating activities Net cash flows from operating activities Cash flows from (used for) investing activities: Cash paid for land Cash flows from (used for) financing activities: Cash received from issuing common stock Cash received from issuing note payable Cash paid as dividends Net cash flows from financing activities Net increase in cash during July Cash as of July 1, 2015 Cash as of July 31, 2015 Feedback