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EXERCISE 2-15Aa.Life, Inc.Effect of Events on the Accounting EquationAssets=Stockholders’EquityEventCashPrepaidRent=Retained Earnings1. PerformedServices36000360002. Prepaid Rent(18000)18000NA3. Used Rent(16500)(16500)Totals180001500=19500b.Life, Inc.Income StatementFor the Year Ended December 31, 2016Revenue36000Expense16500Net Income19500
Life, Inc.Balance SheetAs of December 31, 2016AssetsCash18000Prepaid Rent1500Total Assets1950019500Stockholder’s EquityRetained Earning19500Total liabilities andshareholder’s equity19500
EXERCISE 2-15A b. (cont.)Life, Inc.Statement of Cash FlowsFor the Year Ended December 31, 2016Cash Flows from operatingactivitiesCash receipts from revenue36000Cash paid for rent(18000)18000c.