Problem 2 (15 Points) Consider the effects of the independent transactions, a through d, on a company’s balance sheet, income statement, statement of cash flows, and statement of stockholders’ equity. a. Services were performed for cash. b. Inventory was purchased for cash. c. Wages were accrued at the end of the period. d. Rent was paid in cash. Complete the table below to explain the effects and financial statement linkages. Use “+” to indicate the account increases and “-” to indicate the account decreases. a. b. c. d. Balance sheet Cash Noncash assets Total liabilities Contributed capital Retained earnings Other equity Statement of cash flows Operating cash flow Investing cash flow Financing cash flow Income statement Revenues Expenses Net earnings Statement of stockholders’ equity Contributed capital Retained earnings
