On January 1, Year 1, Jana started a small flower merchandisingbusiness that she named Jana?s Flowers. The
Question:
On January 1, Year 1, Jana started a small flower merchandisingbusiness that she named Jana?s Flowers. The company experienced thefollowing events during the first year of operation:
Started the business by issuing common stock for $18,000cash.
Paid $12,000 cash to purchase inventory.
Sold merchandise that cost $9,000 for $19,000 on account.
Collected $16,000 cash from accounts receivable.
Paid $4,500 for operating expenses.
Required
a. Organize ledger accounts under anaccounting equation and record the events in the accounts. Inthe last column of the table, provide appropriate account titlesfor the Retained Earnings amounts.
b-1. Prepare an income statement.
b-2. Prepare a balance sheet.
b-3. Prepare a statement of cashflows.
c. Since Jana sold inventory for $19,000,she will be able to recover more than half of the $18,000 sheinvested in the stock. Do you agree with this statement?
Survey Of Accounting
ISBN: 9781260575293
6th Edition
Authors: Thomas Edmonds, Christopher Edmonds, Philip Olds