Financial Accounting: An Integrated Statements Approach, 2nd Edition

Chapter 2 Basic Accounting Concepts 89

Flagstone Consulting, Inc.

Retained Earnings Statement

For the Month Ended June 30, 2007

Retained earnings, June 1, 2007 $ (c )

Net income for June $ (d)

Less dividends (e) (f )

Retained earnings, June 30, 2007 $ (g)

Flagstone Consulting, Inc.

Balance Sheet

June 30, 2007

Assets

Cash $(h)

Land 54,000

Total assets $139,500

Liabilities

Notes payable $ 45,000

Stockholders’ Equity

Capital stock $75,000

Retained earnings ( i ) ( j )

Total liabilities and stockholders’ equity $ (k)

Flagstone Consulting, Inc.

Statement of Cash Flows

For the Month Ended June 30, 2007

Cash flows from operating activities:

Cash received from customers $ (l)

Deduct cash payments for expenses (m)

Net cash flows from operating activities $ 25,500

Cash flows from investing activities:

Cash payment for purchase of land $(54,000)

Cash flows from financing activities:

Cash received from sale of capital stock $ (n)

Cash received from notes payable (o) $ (p)

Deduct cash dividends 6,000

Net cash flows from financing activities (q )

Net increase in cash $ (r)

June 1, 2007, cash balance (s)

June 30, 2007, cash balance $ (t)