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

Question 105

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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. 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. b)Prepare an income statement and statement of cash flows for 2012.

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