On January 1, 2018, Jana started a small flower merchandising business that she named Jana's Flowers. The
Question:
On January 1, 2018, Jana started a small flower merchandising business that she named Jana's Flowers.
The company experienced the following events during the first year of operation:
1. Started the business by issuing common stock for $30,000 cash.
2. Paid $19,000 cash to purchase inventory.
3. Sold merchandise that cost $10,000 for $21,000 on account.
4. Collected $16,000 cash from accounts receivable.
5. Paid $3,750 for operating expenses.
Required
a. Organize ledger accounts under an accounting equation and record the events in the accounts.
b. Prepare an income statement, a balance sheet, and a statement of cash flows.
c. Since Jana sold inventory for $21,000, she will be able to recover more than half of the $30,000 she invested in the stock. Do you agree with this statement? Why or why not?
Common StockCommon stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Step by Step Answer:
Survey of Accounting
ISBN: 978-1259631122
5th edition
Authors: Thomas Edmonds, Christopher Edmonds, Philip Olds, Frances McNair, Bor Yi Tsay