Transactions for Year 1 1. Acquired $85,000 by issuing common stock. 2. Received $100,000 cash for providing services to customers. 3. Borrowed $16,000 cash from creditors. 4. Paid expenses amounting to $53,000. 5. Purchased land for $40,000 cash. Transactions for Year 2 Beginning account balances for Year 2 are: Cash Land Notes payable Common stock Retained earnings $108,000 40,000 16,000 85 , 47,000 1. Acquired an additional $26.000 from the issue of common stock. 2. Received $137,000 for providing services. 3. Paid $11,000 to creditors to reduce loan. 4. Pald expenses amounting to $60,000. 5. Paid a $15,500 dividend to the stockholders. 6. Determined that the market value of the land is $50,000. Assets Event Accounting Equation for Year 1 Liabilities + Stockholders' Equity Notes Common Retained Payable Stock Earnings 85,000+ Account Titles for Retained Earnings + Cash Land 1 11 2 2 ++ 3 + + + + + + 85,000+ 100,000 16,000 (53,000) (40,000) 108,000 16,000 4 + + 5 40,000 40,000 (53,000) (40,000) (93,000) Totals 16,000 85,000+ Assets + MARK'S CONSULTING SERVICES Accounting Equation for Year 2 Liabilities Stockholders' Equity Notes Common Retained Land Payable Stock Earnings 40,000 16,000 85,000 47.000 Event Account Tities for Retained Earnings Cash 108,000 Beg bal 1 2 + 3 4 5 6 11 Totals 108.000 + 40,000 16,000 85,000 + 47,000