Small and Associates, a small manufacturing firm, entered into the following cash transactions during January of 1997. 1. Issued 600 shares of stock for $25 each. 2. Sold services for $4,000. 3. Paid wages of $1,600. 4. Purchased land as a long-term investment for $9,000 cash. 5. Paid a $2,000 dividend. Chapter 5 The Mechanics of Financial Accounting 239 E5—9 (Preparing statements from transactions) E5-1Q (Preparing the state¬ ment of cash flowsfrom the cash T-atcount) E5—1 1 (Classifying adjusting journal entries) 6. Sold land with a book value of $3,000 for $3,500 cash. 7. Paid $1,500 to the bank: $900 to reduce the principal on an outstanding loan and $600 as an interest payment. 8. Paid miscellaneous expenses of $1,800. REQUIRED:

a. Prepare journal entries for each transaction.

b. Prepare a cash T-account, and compute Small’s cash balance as of the end of January. Assume a beginning balance of $5,000.

c. Prepare a statement of cash flows for the month of January.