The following events are for Berea Company for 2012 its first year in business.Assume that all involve receipt or payment of cash.
1.acquired $25,000 cash by issuing stock to owners
2.borrowed $7,000 cash from creditors
3.provided services to customers and received $50,000
4.paid operating expenses amounting to $38,000
5.purchased land for $10,000
6.paid a dividend of $5,000 to owners
Required:
a)Show the effects of each of these events on the accounting equation shown below,showing dollar amounts of increases and decreases; calculate totals for each account at the end of the period. b)Prepare an income statement and balance sheet for 2012.

Question

The following events are for Berea Company for 2012 its first year in business.Assume that all involve receipt or payment of cash.
1.acquired $25,000 cash by issuing stock to owners
2.borrowed $7,000 cash from creditors
3.provided services to customers and received $50,000
4.paid operating expenses amounting to $38,000
5.purchased land for $10,000
6.paid a dividend of $5,000 to owners
Required:
a)Show the effects of each of these events on the accounting equation shown below,showing dollar amounts of increases and decreases; calculate totals for each account at the end of the period.  b)Prepare an income statement and balance sheet for 2012.

Quizplus · Accepted Answer

The Answer of The following events are for Berea Company for 2012 its first year in business.Assume that all involve receipt or payment of cash.
1.acquired $25,000 cash by issuing stock to owners
2.borrowed $7,000 cash from creditors
3.provided services to customers and received $50,000
4.paid operating expenses amounting to $38,000
5.purchased land for $10,000
6.paid a dividend of $5,000 to owners
Required:
a)Show the effects of each of these events on the accounting equation shown below,showing dollar amounts of increases and decreases; calculate totals for each account at the end of the period.  b)Prepare an income statement and balance sheet for 2012.

The Following Events Are for Berea Company for 2012 Its