38 Chapter 1 The Role of Accounting in Business
Balance Sheet
For the Month Ended October 31, 2007Assets
Cash $11,650
Accounts payable 3,125
Land 15,000
Total assets $29,775Liabilities
Accounts receivable $20,300
Prepaid expenses 1,800Stockholders’ Equity
Capital stock $25,000
Retained earnings 35,075 60,075
Total liabilities and stockholders’ equity $82,175Statement of Cash Flows
October 31, 2007Cash flows from operating activities:
Cash received from customers $56,800
Cash paid for operating expenses 52,150
Net cash flow from operating activities $ 4,650
Cash flows from financing activities:
Cash received from issuance of capital stock $25,000
Dividends paid to stockholders (3,000)
Net cash flow from financing activities 22,000
Net cash flow and cash balance as of
October 31, 2007 $26,650Marlene Laney
Retained Earnings Statement
October 31, 2006Retained earnings, October 1, 2007 $ 4,450
Less dividends during October 3,000
$ 1,450
Net income for the month 33,625
Retained earnings, October 31, 2007 $35,075