Based on the following information, record all the transactions, prepare financial statements, and build your own set of books.

January 1 - Started the business by contributing $100,000 of personal capital in exchange for common stock

January 1 Paid $5,000 to the lawyers to incorporate my business entity

January 2 Acquired computers for the business for $5,000

January 3 Acquired inventory held for re-sale for $20,000

January 4 First sale took place, I sold half of the inventory originally purchased for $50,000 cash.

February 1 Hired your first employee, and paid $5,000 cash for wages. I paid the same amount of wages on the first of each month for the remainder of the year.

February 15 Sold the rest of the inventory for $75,000 cash

March 15 I was sued by an outside party, and got an invoice from lawyers for $2,000 for legal work performed, due in April

April 1 Paid the legal invoice due

April 25 Bought more inventory from my supplier, for $20,000 on credit

May 1 Borrowed $100,000 from the bank, at an annual rate of 10%, due on December 31.

May 31 Sold all remaining inventory for $50,000, on credit.

June 30 Collected on all outstanding Accounts Receivable.

July 15 Sold all of the computers for $1,000 in cash.

September 1 bought more inventory, for $30,000 using long-term note payable.

October 1 sold all of inventory for $50,000 on credit

November 1 collected on accounts receivable, in all cash.

December 31 made interest payment on the note

December 31 paid $5,000 bonus in cash to employee

December 31 books were closed, you paid 50% of all the remaining profit as cash dividend

a. Summary of Events: Use this to record your transactions and any transaction that affects your business.

b. Horizontal Worksheet: This is similar to the charts youve seen in your homework. It can be used to determine how each transaction will affect the financial statements, i.e. - which accounts are used. Use of this worksheet is required, as it is a great tool and will make preparing your financial statements much easier.

i. After you record all the transactions, remember to close the books and make the adjustment entries each business makes at the end of an accounting period.

c. Financial Statements: You are required to prepare an Income Statement, Statement of Changes in Stockholders Equity, and Balance Sheet.

i. The provided template should greatly reduce the amount of work you are to do.

ii. You may also create your own financial statements if you prefer. It is probably easiest to use the pre-formatted template provided.

iii. You do NOT have to prepare a Cash Flow Statement, although a template is provided. If you choose to do the Cash Flow Statement, and complete it correctly, 5 points extra credit will be awarded. Less extra credit points will be awarded if your Cash Flow Statement doesnt add up.

G & M Painting LLC G & M Painting LLC G & M Painting LLC Income Statement (Single-Step) For the Period Ended Week? Balance Sheet As of Week? Statement of Cash Flows For the Period Ended Week? Assets Cash flows from operating activities Operating items Revenues Expenses Inflow from revenues Inflow from investment income Outflow for expenses Outflow for loss from exchange of land Outflow for income tax Cash Accounts Receivable Operating income an Investments Railroads Buildings Houses Accumulated Depreciation Building:s Nonoperating items Loss on exchange of property Interest expense Net cash flow from operating activities Income before taxes Total Assets Cash flows from investing activities Liabilities Inflow from sale of houses Inflow from sale of land Outflow for puchase of houses Outflow for purchase of railroad Outflow for purchase of land Income taxes Net income Notes Payable Interest Payable Property Taxes Payable G & M Painting LLC Income Taxes Payable Net cash flow from investing activities Statement of Changes in Stockholders' Equity For the Period Ended Week? Total Liabilities Stockholders' Equity Cash flows from financing activities Beginning common stock Plus: Common stock issued Inflow from issue of common stock Inflow from notes payable Outflow for notes payable Outflow for dividends paid Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities & Stockholders' Equity Ending common stock Beginning retained earnings Plus: Net income Less: Dividends Net cash flow from financing activities Net change in cash Plus: Beginning cash balance Ending cash balance Ending retained earnings Total stockholders' equity