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20 January, 11:25

Milea Inc. experienced the following events in Year 1, its first year of operations: Received $13,500 cash from the issue of common stock. Performed services on account for $45,000. Paid the utility expense of $1,100. Collected $35,270 of the accounts receivable. Recorded $8,100 of accrued salaries at the end of the year. Paid a $1,100 cash dividend to the stockholders.

a. Prepare the income statement

b. Prepare the statement of changes in stockholders' equity

c. Prepare the balance sheet as of December 31.

d. Prepare the statement of cash flows for the Year 1 accounting period.

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  1. 20 January, 13:26
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    Income statement

    For the year ended December 31, year 1

    Revenue:

    Service revenue 45000

    Expense:

    Utilities expense 1100

    Salary expense 8100

    Total expense 9200

    Net income 35800

    Statement of Changes in Stockholders' Equity

    For the Year Ended December 31, Year 1

    Beginning common stock: -

    Common stock issued 13,500

    Ending common stock 13,500

    Beginning retained earnings -

    Net income 35,800

    Dividends (1100)

    Ending retained earnings 34,700

    Total stockholders' equity 48,200

    Balance Sheet

    As of December 31, Year 1

    Assets

    Cash (13500+35270-1100-1100) 46,570

    Accounts receivable (45000-35270) 9730

    Total assets 56,300

    Liabilities

    Salaries payable 8100

    Total liabilities 8100

    Stockholders' Equity

    Common stock 13,500

    Retained earnings 34,700

    Total stockholders' equity 48,200

    Total liabilities and stockholders' equity 56,300

    Statement of Cash Flows

    For the Year Ended December 31, Year 1

    Cash flow from operating activities

    Cash received from customers 35,270

    Cash paid for utility expense (1,100)

    Net cash flow from operating activities 34,170

    Cash flow from investing activities -

    Cash flow from financing activities

    Issuance of common stock 13,500

    Cash paid for dividends (1100)

    Net cash flow from financing 12,500

    Net change in cash 46,670

    Beginning cash balance -

    Ending cash balance 46,670
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