Expo Co. was started in 2012. During 2012, the company

(1) Acquired $11,000 cash from the issue of common stock,

(2) Earned cash revenue of $18,000,

(3) Paid cash expenses of $10,500, and

(4) Paid a $1,000 cash dividend to the stockholders.

Required

a. Record these four events in a horizontal statements model. Also, in the Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first event is shown as an example.

b. What does the income statement tell you about the assets of thisbusiness?

Transcribed Image Text:

Balance Sheet Income Statement Event No. CashN. Pay C. Stock. Ret. Ear Rev. NA + 11,000 + NAINA Statement of Exp. = Net Inc. Cash Flows 11,000 FA NA NA - =