Effect of transactions on general ledger accounts
At the beginning of 2012, J&J Corp.’s accounting records had the following general ledger accounts and balances.
J&J CORP. Accounting Equation | ||||||||
Event | Assets | = | Liabilities | + | Stockholders′ Equity | Acct. Titles for RE | ||
| Cash | Land |
| Notes Payable |
| Common Stock | Retained Earnings |
|
Balance 1/1/2012 | 10,000 | 20,000 |
| 12,000 |
| 7,000 | 11,000 |
|
J&J Corp. completed the following transactions during 2012.
1.Purchased land for $5,000 cash.
2.Acquired $25,000 cash from the issue of common stock.
3.Received $75,000 cash for providing services to customers.
4.Paid cash operating expenses of $42,000.
5.Borrowed $10,000 cash from the bank.
6.Paid a $5,000 cash dividend to the stockholders.
7.Determined that the market value of the land is $35,000.
Required
a. Record the transactions in the appropriate general ledger accounts. Record the amounts of revenue, expense, and dividends in the Retained Earnings column. Provide the appropriate titles for these accounts in the last column of the table.
b. Determine the net cash flow from financing activities.
c. What is the balance in the Retained Earnings account as of January 1, 2013?
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