Wong Corporation began operations on January 1, 2022. Its adjusted trial balance at December 31, 2022 and

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Wong Corporation began operations on January 1, 2022. Its adjusted trial balance at December 31, 2022 and 2023, is shown below along with some other information.


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1$2,000 of the notes payable will be paid during 2024.Other information regarding Wong Corporation and its activities during 2023:1. Assume all accounts have normal balances.2. Equipment was purchased for $26,000 cash after selling old equipment for $8,000 cash.3. Common shares were issued for cash.4. Cash dividends were declared and paid.5. Machinery was sold for cash of $10,000.6. All revenues and other expenses were on credit.



RequiredUsing the information provided, prepare a statement of changes in equity and a statement of cash flows (applying the indirect or direct method)* for the year ended December 31, 2023, plus a classified balance sheet at December 31, 2023.



Analysis Component:Refer to the statement of cash flows just prepared. Explain how it was possible for Wong Corporation to purchase $26 (thousand) of new equipment and pay $20 (thousand) dividends given that the company’s income was only $16 (thousand).

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Fundamental Accounting Principles Volume 2

ISBN: 9781260881332

17th Canadian Edition

Authors: Kermit D. Larson, Heidi Dieckmann, John Harris

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