Maggie Stern Started a Consulting Business, Stern Consulting, on January

question 119

Essay

Maggie Stern started a consulting business, Stern Consulting, on January 1, Year 1. The following events occurred in Year 1:
1)Acquired $9,000 cash by issuing common stock2)Provided services on account, $27,5003)Paid cash for $13,500 in operating expenses4)Collected $11,000 of the revenue that was previously recorded on account5)Paid a cash dividend of $5,000 to the stockholders
Required: a)Show the effects of the above transactions on the accounting equation.
b)Prepare an income statement and statement of cash flows for Year 1.

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Definitions:

Personal Application

The process of applying concepts, ideas, or skills to one's own life or personal situation to achieve specific personal goals or improvements.

Heritability of Intelligence

The proportion of variance in intelligence among individuals in a population that can be attributed to genetic differences.

Adoption Studies

These are research methods in psychology and genetics that compare adopted children to their adoptive and biological parents to understand the influence of genetics versus environment.

Genes and Environment

Refers to the interplay between genetic predispositions and environmental factors in determining an individual's traits and behaviors.