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Consider the effects of the independent transactions, a through f, on a companys balance sheet, income statement, statement of cash flows, and statement of stockholders equity.

1. Owner invests cash into the business in exchange for stock.
2. Recognizes account receivable for services provided.
3. Pays account payable with cash.
4. Buys land with cash.
5. Buys plant equipment on credit.
6. Borrows money by taking out loan at bank.

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.	e.	f.
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

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