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Making an income statement, balance sheet given transactions

I am getting confused by the different accounting spreadsheets. Can you assist with a word problem and establishing the spreadsheets I am having problems with?

Overview - Smith Enterprises started the 2002 accting period with $30,000 of assets (all cash), $18000 of liabilities, $4000 of common stock. During the year, Smith's earned cash revenues of $48,000, paid cash expenses of $32,000 and paid a cash dividend to stockholders of $2000. Smith's also acquired $10,000 of additional cash from the sale of common stock and paid $6000 cash to reduce the liability owed to a bank.

Question -

Can you help me prepare a income statement, statement of changes in stockholder's equity, period end balance sheet, and statement of cash flows for the 2002 accounting period.

Where I continue to get incorrect balances if the question has a note that reads to determine the amount of begining retained earnings before considering the effects of the current period; might be helpful to record all events under an accting equation before preparing the statements?

Solution Preview

Please see the attached file

Overview - Smith Enterprises started the 2002 accting period with $30,000 of assets (all cash), $18000 of liabilities
$4000 of common stock. During the year, Smith's earned cash revenues of $48,000, paid cash expenses of $32,000 and paid
a cash dividend to stockholders of $2000. Smith's also acquired $10,000 of additional cash from the sale of common stock
and paid $6000 cash to reduce the liability owed to a bank.

The expanded form of accounting equation is
Assets = Liabilities + Common stock + Retained earnings
First we calculate the retained earnings at the beginning of the period
30,000 = 18,000+4,000 + Retained Earnings
Retained earnings at the start of 2002 = 8,000

We now make the financial statements.
1. Income statement - we need to look at revenues and expenses. It is stated that
revenues were 48,000 and expenses were 32,000.
The ...

Solution Summary

The solution explains how to make the income statement, balance sheet, statement of stockholders equity and statement of cash flows for Smith Enterprises

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