Prepare an income statement, statement of changes
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Prepare an income statement, statement of changes in stockholders' equity, year-end balance sheet, and statement of cash flows for the 2004 accounting period.
Real World, Inc., experienced the following events during 2004.
1. Acquired $55,000 cash from the issue of common stock.
2. Paid $15,000 cash to purchase land.
3. Borrowed $5,000 cash from First Bank.
4. Provided services for $21,000 cash.
5. Paid $1,500 cash for utilities expense.
6. Paid $11,000 cash for other operating expenses.
7. Paid a $2,000 cash dividend to the stockholders.
8. Determined that the market value of the land purchased in Event 2 is $20,000.
Required
a. The January 1, 2004, general ledger account balances are shown in the following accounting equation.
Record the eight events in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table.
J & A, INC.
A Real World, Inc.
Event Assets = Liabilities + Stockholder's Account
Equity Titles for R/E
Balance Cash Land Notes Common Retained
Payable Stock Earnings
1/1/2004 12,000 20,000 0 15,000 17,000
Accounting Equation
Acct. Titles
Event Assets _ Liabilities _ Stockholders' Equity for RE
Notes Common Retained
Cash Land Payable Stock Earnings
b. Prepare an income statement, statement of changes in stockholders' equity, year-end balance sheet, and statement of cash flows for the 2004 accounting period.
Please Show All Work.
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