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Chapter 2 Basic Accounting Systems: Cash Basis P2-3 Financial statements The following amounts were taken from the accounting
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Income Statement
Fees Earned $ 620,000.00
Less: Expenses:
Interest Expense $     4,800.00
Misc. Expense $   10,200.00
Rent Expense $   70,000.00
Salaries Expense $ 272,000.00
Utilities Expense $   85,000.00
Taxes Expense $   43,000.00 $ 485,000.00
Net Income $ 135,000.00
Statement of Stockholder's Equity
Beginning balance of Retained Earnings $                 -  
Add: Net Income $ 135,000.00
Less: Dividends $ (15,000.00)
Ending balance of Retained Earnings $ 120,000.00
Balance Sheet
Assets Liability and Equity
Cash $    60,000.00 Notes Payable $    80,000.00
Land $ 215,000.00
Stockholder's Equity
Common Stock $    75,000.00
Retained Earnings $ 120,000.00
Total $ 275,000.00 Total $ 275,000.00
Statement of Cash Flow
Cash flow from operating activities:
Cash from fees earned $ 620,000.00
Cash paid for:
Interest Expense $     (4,800.00)
Misc. Expense $   (10,200.00)
Rent Expense $   (70,000.00)
Salaries Expense $(272,000.00)
Utilities Expense $   (85,000.00)
Taxes Expense $   (43,000.00)
Cash generated from operating activities (A) $ 135,000.00
Cash flow from investing activities:
Land purchased $(215,000.00)
Cash generated from investing activities (B) $(215,000.00)
Cash flow from financing activities:
Dividend paid $   (15,000.00)
Common Stock Issued $    75,000.00
Notes payable Issued $    80,000.00
Cash generated from financing activities (C) $ 140,000.00
Net Cash generated (A+B+C) $    60,000.00
Add: Beginning cash balance $                   -  
Ending cash balance $    60,000.00
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