Chapter 4 Accounting Information Systems 167Online Solutions
Balance Sheet
December 31, 2007Assets
Current assets:
Cash $ 2,065
Accounts receivable 2,720
Supplies 760
Prepaid insurance 2,300
Total current assets $ 7,845
Property, plant, and equipment:
Office equipment $1,800
Less accumulated depreciation 50 $ 1,750
Land 20,000
Total fixed assets 21,750
Total assets $29,595Liabilities
Current liabilities:
Accounts payable $ 900
Wages payable 250
Unearned rent 240
Total liabilities $ 1,390Stockholders’ Equity
Capital stock $25,000
Retained earnings 3,205
Total stockholders’ equity 28,205
Total liabilities and stockholders’ equity $29,595Exhibit 12
Concluded
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Statement of Cash Flows
For the Two Months Ended December 31, 2007Cash flows from operating activities:
Cash received from customers $ 14,120
Cash received from renting land 360 $14,480
Deduct cash payments for expenses 11,615
Net cash flows from operating activities $ 2,865
Cash flows used for investing activities:
Purchase of land $(20,000)
Purchase of office equipment (1,800)
Net cash flows used in investing activities (21,800)
Cash flows from financing activities:
Issuance of capital stock $ 25,000
Payment of dividends (4,000)
Net cash flows from financing activities 21,000
Net increase in cash $ 2,065
November 1, 2007, cash balance 0
December 31, 2007, cash balance $ 2,065