The December 31, 2015, balance sheet of Smedley Company is as follows: During 2016 the company entered

Question:

The December 31, 2015, balance sheet of Smedley Company is as follows:

During 2016 the company entered into the following transactions:
1. Common stock was issued for $35,000 cash.
2. Services were performed for $50,000 cash.
3. Cash expenses of $24,000 were incurred.
4. Long-term liabilities of $15,000 were paid.
5. Dividends of $7,000 were declared and paid.
a. Classify each transaction as operating, investing, or financing and then prepare an income statement.
b. Compute comprehensive income and compare it to the income amount calculated in (a).
c. Explain why the two dollar amounts areequal.

Common Stock
Common 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... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...