Maggie Stern Started a Consulting Business,Stern Consulting,on January 1,2016 by Issuing

question 18

Essay

Maggie Stern started a consulting business,Stern Consulting,on January 1,2016 by issuing $9,000 of common stock.In addition,the following events occurred in 2016.
Provided services on account,$27,500.
Paid cash for $13,500 in operating expenses.
Collected $11,000 of the revenue that was previously recorded on account.
Paid a cash dividend of $5,000 to the stockholders.
Required:
a)Show the effects of the above transactions on the accounting equation.Precede the amount with a minus sign if the transaction reduces that section of the equation.Enter 0 for items not affected.
b)Prepare an income statement and statement of cash flows for 2016.Precede a cash outflow amount with a minus sign.

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