Steve Sims started a consulting business on January 1,2012,and the business engaged in the following transactions during the year:
1.Issued $7,000 of common stock for cash
2.Provided services on account,$25,500
3.Incurred $11,500 of operating expense,but only paid $5,000 of this amount
4.Collected $9,000 of the revenue that was previously recorded on account
5.Paid a cash dividend of $4,000 to the stockholders
Required:
a)Show the effects of the above transactions on the accounting equation. b)Prepare an income statement and statement of cash flows for 2012.

Question

Steve Sims started a consulting business on January 1,2012,and the business engaged in the following transactions during the year:
1.Issued $7,000 of common stock for cash
2.Provided services on account,$25,500
3.Incurred $11,500 of operating expense,but only paid $5,000 of this amount
4.Collected $9,000 of the revenue that was previously recorded on account
5.Paid a cash dividend of $4,000 to the stockholders
Required:
a)Show the effects of the above transactions on the accounting equation.  b)Prepare an income statement and statement of cash flows for 2012.

Quizplus · Accepted Answer

The Answer of Steve Sims started a consulting business on January 1,2012,and the business engaged in the following transactions during the year:
1.Issued $7,000 of common stock for cash
2.Provided services on account,$25,500
3.Incurred $11,500 of operating expense,but only paid $5,000 of this amount
4.Collected $9,000 of the revenue that was previously recorded on account
5.Paid a cash dividend of $4,000 to the stockholders
Required:
a)Show the effects of the above transactions on the accounting equation.  b)Prepare an income statement and statement of cash flows for 2012.

Steve Sims Started a Consulting Business on January 1,2012,and the Business