Jack Grimes started a consulting business, Grimes Consulting, on January 1, 2013 by issuing $7,000 of common stock. In addition, the following events occurred in 2013.
Provided services on account, $25,500.
Paid cash for $11,500 in operating expenses.
Collected $9,000 of the revenue that was previously recorded on account.
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 2013.

Question

Jack Grimes started a consulting business, Grimes Consulting, on January 1, 2013 by issuing $7,000 of common stock. In addition, the following events occurred in 2013.
Provided services on account, $25,500.
Paid cash for $11,500 in operating expenses.
Collected $9,000 of the revenue that was previously recorded on account.
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 2013.

Quizplus · Accepted Answer

The Answer of Jack Grimes started a consulting business, Grimes Consulting, on January 1, 2013 by issuing $7,000 of common stock. In addition, the following events occurred in 2013.
Provided services on account, $25,500.
Paid cash for $11,500 in operating expenses.
Collected $9,000 of the revenue that was previously recorded on account.
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 2013.

Jack Grimes Started a Consulting Business, Grimes Consulting, on January