Flagstone Company Was Founded on January 1, 2013

Essay

Flagstone Company was founded on January 1, 2013. During 2013, the company experienced the following events:
1. earned cash revenue of $25,000
2. paid cash expenses of $20,500
3. issued common stock for $15,000 cash
4. paid cash dividend of $1,000 to owners.
Required:
a) Write an accounting equation and record effects of each accounting event under appropriate general ledger account headings, showing dollar amounts of increases and decreases and totals at the end of the year.
b) Prepare the 2013 income statement and balance sheet for Flagstone Company.