Ortho Com pany experienced the following events during its first- and second-year operations: Year 1 Transactions:
1. Acquired $68,000 cash from the issue of common stock.
2. Borrowed $36,000 cash from the National Credit Union.
3. Earned $59,000 of cash revenue.
4. Incurred $43,000 of cash expenses
5. Paid a $7,000 cash dividend
6. Paid $37,000 cash to purchase land.
Year 2 Transactions:
1. Acquired $50,000 cash from the issue of common stock
2. Borrowed $20,000 cash from the National Credit Union
3. Earned $85,000 of cash revenue.
4. Incurred $62,000 of cash expenses.
5. Paid a $2,000 cash dividend.
6. Paid $25,000 cash to purchase land.
Required:
a. Record the transactions in an accounting equation
b-1. Prepare an income statement for year 1 and year 2.
b-2. Prepare a stockholders' equity for year 1 and year 2.
b-3. Prepare a balance sheet for year 1 and year 2.
b-4. Prepare a statement of cash flows for year 1 and year 2.