Financial Accounting: An Integrated Statements Approach, 2nd Edition

e. Determine the net cash flows from financing activities.

f. Determine the net increase or decrease in cash.

After its first month of operation, the following amounts were taken from the accounting records

of Three Rivers Realty, Inc., as of November 30, 2007.

Capital stock $10,000 Notes payable $30,000

Cash 21,500 Rent expense 6,000

Dividends 4,000 Retained earnings 0

Interest expense 2,000 Salaries expense 9,000

Land 37,000 Sales commissions 49,500

Miscellaneous expense 2,500 Utilities expense 7,500

Prepare an income statement for the month ending November 30, 2007.

Using the financial data shown in Exercise 2-17 for Three Rivers Realty, Inc., prepare a retained

earnings statement for the month ending November 30, 2007.

Using the financial data shown in Exercise 2-17 for Three Rivers Realty, Inc., prepare a balance

sheet as of November 30, 2007.

Using the financial data shown in Exercise 2-17 for Three Rivers Realty, Inc., prepare a statement

of cash flows for the month ending November 30, 2007.

Describe how transactions of Lucent Technologies, Inc.,would affect the three elements of the ac-

countingequation.

a. Received cash from issuing stock.

b. Paid off long-term debt.

c. Received proceeds from selling a portion of manufacturing operations for a gain on the

sale.

d. Paid dividends.

80 Chapter 2 Basic Accounting Concepts

Exercise 2-17

Income statement

Goals3, 5

Net income, $22,500

Exercise 2-18

Retained earnings statement

Goals3, 5

Retained earnings,

November 30, 2007, $18,500

Exercise 2-19

Balance sheet

Goals3, 5

Total assets, $58,500

Exercise 2-20

Statement of cash flows

Goals3, 5

Net cash flows from

operating activities, $22,500

Exercise 2-21

Effect of transactions on ac-

counting equation

Goals1, 2, 4