Grant Hylton started a consulting business,Grant Consulting,on January 1,2016,and the business engaged in the following transactions during the year:
1.Issued $40,000 of common stock for cash
2.Provided services on account,$46,500
3.Incurred $37,500 of operating expense,but only paid $32,000 of this amount
4.Collected $39,000 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.Precede the amount with a minus sign if the transaction reduces that section of the equation.Enter 0 for items not affected.

b)Prepare an income statement and statement of cash flows for 2016.Precede a cash outflow amount with a minus sign.

Question

Grant Hylton started a consulting business,Grant Consulting,on January 1,2016,and the business engaged in the following transactions during the year:
1.Issued $40,000 of common stock for cash
2.Provided services on account,$46,500
3.Incurred $37,500 of operating expense,but only paid $32,000 of this amount
4.Collected $39,000 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.Precede the amount with a minus sign if the transaction reduces that section of the equation.Enter 0 for items not affected.
  
b)Prepare an income statement and statement of cash flows for 2016.Precede a cash outflow amount with a minus sign.

Quizplus · Accepted Answer

The Answer of Grant Hylton started a consulting business,Grant Consulting,on January 1,2016,and the business engaged in the following transactions during the year:
1.Issued $40,000 of common stock for cash
2.Provided services on account,$46,500
3.Incurred $37,500 of operating expense,but only paid $32,000 of this amount
4.Collected $39,000 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.Precede the amount with a minus sign if the transaction reduces that section of the equation.Enter 0 for items not affected.
  
b)Prepare an income statement and statement of cash flows for 2016.Precede a cash outflow amount with a minus sign.

Grant Hylton Started a Consulting Business,Grant Consulting,on January 1,2016,and the Business