Cook Inc. experienced the following events in 2011, its first year of operations. 1. Received ($ 15,000)
Question:
Cook Inc. experienced the following events in 2011, its first year of operations.
1. Received \(\$ 15,000\) cash from the issue of common stock.
2. Performed services on account for \(\$ 42,000\).
3. Paid the utility expense of \(\$ 800\).
4. Collected \(\$ 32,000\) of the accounts receivable.
5. Recorded \(\$ 5,000\) of accrued salaries at the end of the year.
6. Paid a \(\$ 1,000\) cash dividend to the stockholders.
Required
a. Record these events in general ledger accounts under an accounting equation. In the last column of the table, provide appropriate account titles for the Retained Earnings amounts. The first transaction has been recorded as an example.
b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for the 2011 accounting period.
c. Why is the ending cash balance the same as the net change in cash on the statement of cash flows?
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