(Solution) - Using Financial Reports Analyzing Changes in Accounts and -(2025 Original AI-Free Solution)

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Using Financial Reports: Analyzing Changes in Accounts and Preparing Financial Statements
Pete?s Painting Service was organized as a corporation on January 20, 2011, by three individuals, each receiving 5,000 shares of stock from the new company. The following is a schedule of the cumulative account balances immediately after each of the first 10 transactions ending on January 31, 2011.

Required:
1. Analyze the changes in this schedule for each transaction; then explain the transaction. Transaction (a) is an example:
a. Cash increased $75,000, and Contributed Capital (stockholders? equity) increased $75,000. Therefore, transaction (a) was an issuance of the capital stock of the corporation for $75,000 cash.
2. Based only on the preceding schedule after transaction (j), prepare an income statement, a statement of stockholders? equity, and a balance sheet.
3. For each of the transactions, indicate the type of effect on cash flows (O for operating, I for investing, or F for financing) and the direction (+ for increase and ? for decrease) and amount of the effect. If there is no effect, write none. The first transaction is provided as anexample.