Transaction

Operating Activity

Investing Activity

Financing Activity

Office supplies were purchased for cash.

Dividends were declared and paid.

Bonds payable with a face value of $100,000 were sold for cash at 96.

A building was purchased and paid for.

Treasury stock was sold.

Accounts Payable were paid off.

Common stock of another firm was purchased for cash.

A machine with an original cost of $30,000 was sold for $7,000. Accumulated Depreciation to date was $23,000.

Short-term marketable securities (not cash equivalents) were sold.

Interest expense on the bonds above was paid in cash.

Land was purchased for cash.

Dividends were received on the common stock acquired above.

ABC Music Co.

Income Statement

For the Year Ended June 30, 2016

Net Sales

$350,000

Less Expenses

  Cost of Goods Sold

$200,000

  Depreciation Expense

    20,000

  Administrative Expenses

    52,000

  Selling Expenses

    45,000

  Loss on Sale of Investment

         500

Total Expenses

  317,500

Net Income

$  32,500

ABC Music Co.

Comparative Balance Sheets

June 30 2016 and 2015

Assets

2016

2015

Cash

$  4,500

$ 15,000

Accounts Receivable (net)

  35,000

   27,500

Inventory

  40,000

   50,000

Prepaid Expenses

     3,000

     2,500

Long Term Investments

   20,000

   25,000

Plant and Equipment

   80,000

   40,000

Accumulated Depreciation

 (20,000)

  (12,000)

Total Assets

$162,500

$148,000

Liabilities

Accounts Payable

$   2,000

$   6,000

Wages Payable

        220

        260

Taxes Payable

        780

        740

Notes Payable

  20,000

   12,000

Total Liabilities

$23,000

$ 19,000

Stockholders’ Equity

Common Stock

$ 65,000

$  65,000

Retained Earnings

   81,500

    64,000

Total Paid in Capital and Retained Earnings

146,500

 129,000

               Less: Treasury Stock

 (  7,000)

             0

Total Stockholders’ Equity

$139,500

$129,000

Total Liabilities and Stockholders’ Equity

$162,500

$148,000