Year 1 Transaction List: 1. Acquired $550,000 by signing a note payable with a local bank on Jan 1. 2. Sold 25.000 shares of $22 par value Common Stock for $1,500,000 3. Purchased Equipment for $300,000 cash 4. Purchased 25,000 units of Inventory on Account at $1.15 per unit 5. Sold 15,000 units at $3.50 on Account 6. Collected $70,000 of accounts receivable 7. Paid $17.250 of Accounts Payable 8. Purchased 170,000 units of Inventory on Account at $1.50 per unit 9. Sold 175,000 units at $3.50 on Account 10. Collected $472,500 of accounts receivable 11. Paid $118.600 of Accounts Payable 12. Purchased 275.000 units of Inventory on Account at $1.35 per unit 13. Sold 200,000 units at $3.50 on Account 14. Collected $735,000 of accounts receivable 15. Paid $294.150 of Accounts Payable 16. Purchased 300.000 units of Inventory on Account at $1.15 per unit 17. Record Sales & Marketing Expenses of $30,000 (paid in cash) 18. Record Operating Expenses of $75,708 (paid in cash) 19. Record Wage Expenses of $40.000 (paid in cash) 20. Record Product Line Research & Development Expenses of $150.000 (paid in cash) 21. Record Advertising Expenses of $87.500 (paid in cash) 22. Made the yearly required payment on the note payable. The note carries a 7% interest rate and requires payments of $50,000 plus interest each December 31. 23. Record Year 1 Depreciation on Equipment with Salvage Value of $38.000 and useful life of 7 Years (straight-line depreciation) 24. Declared a $10,000 cash dividend for stockholders 25. Paid a $10,000 cash dividend for stockholders Year 1 Assets Cash $ Total Assets $ Liabilities Accounts Payable Total Liabilities $ Stockholders Equity $ $ Total Stockholders Equity $ 3 Total Liabilities and Stockholders Equity $ D 1 1 2 Statement on Stockholders' Equity Year 1 3 4 5 6 Beginning Common Stock 7 Plus: common stock issued 8 Plus: additional paid in capital 9 Ending Common Stock $ 10 11 Beginning Retained Earnings 12 Plus: Net Income 13 Less: Dividends 14 Ending Retained Earnings 15 16 Total Stockholders' Equity $ $ 17 18 19 20 21 1 Statement of Cash Flows Year 1 5 Cash flows from operating activities 6 Cash receipts from revenue 7 Cash payments for expenses 8 Net cash flow from operating activities $ 10 Cash flows from investing activities: 11 Cash payments to purchase equipment $ 12 13 Cash flows from financing activities: 14 Cash receipts from borrowing funds 15 Cash receipts from issuing common stock 16 Cash payments to repay borrowed funds 17 Cash payments for dividends 18 Net cash flow from financing activities 19 $ $ 20 Net increase/(decrease) in cash 21 Plus: beginning cash balance 22 Ending cash balance 23 $ 24