Lippitt Painting Service Company was organized on January 20, 2011, by three individuals, each receiving 5,000 shares of stock from the new company. The following is a schedule of the cumulative account balances immediately after each of the first 10 transactions ending on January 31, 2011.

Required:
1. Analyze the changes in this schedule for each transaction; then explain the transaction. Transactions (a) and (b) are examples:
a. Cash increased $75,000, and Contributed Capital (stockholders' equity) increased $75,000. Therefore, transaction (a) was an issuance of the capital stock of the corporation for $75,000 cash.
b. Cash decreased $5,000, office fixtures (an asset) increased $20,000, and note payable (a liability) increased $15,000. Therefore, transaction (b) was a purchase of office fixtures that cost $20,000. Payment was made as follows: cash, $5,000; note payable, $15,000.
2. Based only on the preceding schedule after transaction (j), prepare an income statement, a statement of retained earnings, and a balance sheet.
3. For each of the transactions, indicate the type of effect on cash flows (O for operating, I for investing, or F for financing) and the direction (+ for increase and €“ for decrease) and amount of the effect. If there is no effect, write none. The first transaction is provided as an example.

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CUMULATIVE BALANCES Accounts Gadh $75,000 $70000 ccounts Receivable Office Fixtures Land Accounts Pavable Note Payable long-term) Contributed Capital 75.000 75000 75.000 75.000 75.000 75.000 75.000 75.000 75.000 75.000 $75,000| $70.000丨 $85.000| $71.000 | $61,000|$61,000|$57,000| $46,000 |S41.000|$57.000 12,00012,00012,000 26,000 26,000 26,000 26,000 10,000 20,00020,000 20,000 20,00020,000 20,00020,000 20,000 20,000 18,000 18,00018,000 18,000 18,000 18,000 18,000 3.0003.000 3.000 10,000 5.000 5.000 15.000 | 15.000丨 19.000| 19,000 | 19,000| 19,000| 19,000 | 19,000| 19,000 Retained Earnings Paint Revenuc Supplies Expense Wages Expense 14.00) | 4.000) (4,000, I 14,000) 27.000 27.000 27,000 41.000 4100041.000 41,000 41.000 5,000 5,0005,0008,000 8,000 8,000 8,000 8,0008,000 23,000 23,000 23,000 Operating, Investing. orDirection and Amount Transaction Financing Elfect of the Effect +75,000