Demonstration_Problem_for_Chapter_1_student

Demonstration_Problem_for_Chapter_1_student - Demonstration...

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Demonstration Problem 1-1 The Accounting Cycle The events below apply to the Video Services Company (VSC). Assume that all transac- tions involve receiving or paying cash. Transactions for the year 2003: 1. The company was started when it acquired $9,000 cash by issuing common stock. 2. The company borrowed $5,000 from creditors. 3. The company provided services to customers and received $4,000. 4. The company paid expenses of $2,900. 5. The company paid $500 in dividends to its stockholders. Transactions for the year 2004: 1. The company issued additional common stock for $4,500. 2. The company paid $2,000 to reduce its liabilities. 3. The company provided services to customers and received $6,700. 4. The company paid expenses of $4,300. 5. The company paid $700 in dividends to its stockholders. Transactions for the year 2005: 1. The company issued additional common stock for $2,500. 2. The company borrowed $1,000 from creditors. 3. The company provided services to customers and received $7,400.
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