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Problem 1: Financial Statement Articulation              Consider the effects of the independent transactions, a through...

Problem 1: Financial Statement Articulation       

      Consider the effects of the independent transactions, a through d, on a company’s 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
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Answer #1
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 + - -
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