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Problem 2-1 Name: Section: Score: 28% *Since some answer boxes are correct when left blank, the beginning score is greater than 0%. Instructions...

Chris Woods established an insurance agency on July 1, 2011, and completed the
following transactions during July:
a. Opened a business bank account in the name of Woods Insurance Inc., with
a deposit of $40,000 in exchange for capital stock.
b. Borrowed $30,000 by issuing a note payable.
c. Received cash from fees earned, $28,000.
d. Paid rent on office and equipment for the month, $3,000.
e. Paid automobile expense for the month, $1,800, and miscellaneous expense,
f. Paid office salaries, $4,200.
g. Paid interest on the note payable, $100.
h. Purchased land as a future building site, $55,000.
i. Paid dividends, $2,000.

1. Indicate the effect of each transaction and the balances after each transaction,
using the integrated financial statement framework.
2. Briefly explain why the stockholders’ investments and revenues increased
stockholders’ equity, while dividends and expenses decreased stockholders’
3. Prepare an income statement and retained earnings statement for July.
4. Prepare a balance sheet as of July 31, 2011.
5. Prepare a statement of cash flows for July.

Please see attached Excel spreadsheet, the course wants the information on said document.

Problem 2-1 Name: Section: Score: 28% *Since some answer boxes are correct when left blank, the beginning score is greater than 0%. Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. A red asterisk (*) will appear in the column to the right of an incorrect answer. 1. Assets = Liabilities + Stockholders' Equity Notes Capital Retained Cash + Land = Payable + Stock + Earnings a. b. Bal. c. Bal. d. Bal. e. Bal. f. Bal. g. Bal. h. Bal. i. Bal. 2. 3. WOODS INSURANCE, INC. Income Statement For the Month Ended July 31, 2011 Revenues: Expenses: Total expenses WOODS INSURANCE, INC. Retained Earnings Statement For the Month Ended July 31, 2011 Retained earnings, July 31, 2011 4. WOODS INSURANCE, INC. Balance Sheet July 31, 2011 Assets Total assets Liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity 5. WOODS INSURANCE, INC. Statement of Cash Flows For the Month Ended July 31, 2011 Cash flows from operating activities: Net cash flows from operating activities Cash flows from investing activities: Cash flows from financing activities: Net cash flows from financing activities Cash as of July 1, 2011 Cash as of July 31, 2011 Instructions
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