Jo Birde established an insurance agency on March 1 2013

Jo Birde established an insurance agency on March 1, 2013, and completed the following
transactions during March:a. Opened a business bank account in the name of Birde Insurance
Inc., with a deposit of $50,000 in exchange for capital stock.b. Borrowed $25,000 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, $900.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, $4,000.Instruction1. 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’ equity.3. Prepare an income statement and retained earnings statement for
March.4. Prepare a balance sheet as of March 31, 2013.5. Prepare a statement of cash flows
for March.View Solution:
Jo Birde established an insurance agency on March 1 2013
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