Selected accounts of Alden Consulting, Inc., a financial services business, have the following balances at December 31, 2012, the end of its first year of operations. During the year, Lorraine Alden, the only stockholder, bought $5,400 of stock in the business.
1. Identify each as an asset, liability, revenue, or expense.
2. Prepare the income statement of Alden Consulting, Inc., for the year ended December 31, 2012. What is the result of operations for 2012?
3. Assuming the balance in Retained Earnings on December 31, 2012, was $21,600, what was the amount of the dividends during the year? Answer by preparing a statement of retained earnings to solve for the dividends. Recall that the business has just completed its first year and has no beginning balance for retainedearnings.