The following information is available for Pacilio Security Services Inc. for 2011, its first year of operations. Pacilio provides security services for local sporting events.
The following summary transactions occurred during 2011:
1. Acquired $6,000 from the issue of common stock.
2. Borrowed $5,000 from the Small Business Government Agency. The loan is interest free.
3. Performed security services at local sporting events during the year for $9,000 cash.
4. Paid salaries expense of $3,000 for the year.
5. Purchased land for $4,000.
6. Paid other operating expenses of $2,000 for the year.
7. Paid a cash dividend to the shareholders of $2,500.
8. The market value of the land was determined to be $4,500 at December 31, 2011.
Required:
a. Record the above transactions in an accounting equation. Provide the appropriate account titles for the amounts shown in the Retained Earnings column.
b. Prepare an income statement, statement of changes in stockholders equity, balance sheet, and statement of cash flows for 2011.