Problem 1: Financial Statement Articulation

Consider the effects of the independent transactions, a through d, on a companys balance sheet, income statement, statement of cash flows, and statement of stockholders equity.

1. Services were performed for cash.
2. Inventory was purchased for cash.
3. Wages were accrued at the end of the period.
4. Rent was paid in cash.

Complete the table below to explain the effects and financial statement linkages. Use + to indicate the account increases and to indicate the account decreases.

	a.	b.	c.	d.
Balance sheet
Cash
Noncash assets
Total liabilities
Contributed capital
Retained earnings
Other equity
Statement of cash flows
Operating cash flow
Investing cash flow
Financing cash flow
Income statement
Revenues
Expenses
Net earnings
Statement of stockholders equity
Contributed capital
Retained earnings