Demonstration Problem 1-1 – The Accounting Cycle The events below apply to Computer Services Company

 
   

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Demonstration Problem 1-1 – The Accounting Cycle The events below apply to Computer Services Company (CSC). Assume that all transactions involve receiving or paying cash. Transactions for the year 2015: 1. CSC was started when it acquired S9,000 cash by issuing common stock 2. The company borrowed $5,000 from a hank. 3. The company provided services to customers and received $4,000. 4. The company paid operating expenses of $2,900. 5. The company paid $500 in dividends to its stockholders. Transactions for the year 2016: 1. The company issued additional common stock for $4,500. 2. The company paid S2,000 to reduce its liabilities. 3. The company provided services to customers and received $6,700. 4. The company paid operating expenses of $4,300. 5. The company paid S700 in dividends to its stockholders. Transactions for the year 2017: 1. The company issued additional common stock for $2,500. 2. The company bormowed an additional S1,000 from creditors. 3. The company provided services to customers and received $7,400. 4. The company paid operating expenses of $7,900. 5. The company paid $300 in dividends to its stockholders. 6. The company paid $9,000 to purchase land. Required a Record the events using the horizontal financial statements model. b. Prepare an income statement, statement of changes in stockholders' oquity, balance sheet and statement of cash flows for cach year. Demonstration Problem 1-1 Workpaper, part a. – Liah. + Cash +Land-Liah + C Sek. +Ret. Earn. Assets 2015 Na Beg. hal. Equity Rev. A Exp. – Net Inc. Cash Flow Totals 14,60 -5,000+ 9.000 4,000- 2,900 600 1,100 14.600 NC – Liab, + + Land -Lieh+ C. Sak +Ret. Earn -5000 + 9,000 + 2016 No. Beg. bal. 14600 + Equity Rev. A Exp. Assets – Net Inc. Cash Flow Cash 600