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This problem is based on the transactions for the Smith Engineering Company in your text. Prepare journal entries for each transaction and identify the financial statement impact of each entry. The financial statements are automatically generated based on the journal entries recorded.

Dec.		1		On December 1, Steven Smith forms a consulting business, named Smith Engineering. Smith Engineering receives $32,000 cash from Steven Smith in exchange for common stock.
Dec.		2		Smith Engineering pays $2,600 cash for supplies. The company's policy is to record all prepaid expenses in asset accounts.
Dec.		3		Smith Engineering pays $28,000 cash for equipment.
Dec.		4		Smith Engineering purchases $7,300 of supplies on credit from a supplier, CalTech Supply.
Dec.		5		Smith Engineering provides consulting services and immediately collects $4,300 cash.
Dec.		6		Smith Engineering pays $1,100 cash for December rent.
Dec.		7		Smith Engineering pays $800 cash for employee salary.
Dec.		8		Smith Engineering provides consulting services of $1,700 and rents its test facilities for $400. The customer is billed $2,100 for these services.
Dec.		9		Smith Engineering receives $2,100 cash from the client billed on December 8.
Dec.		10		Smith Engineering pays CalTech Supply $1,000 cash as partial payment for its December 4 $7,300 purchase of supplies.
Dec.		11		Smith Engineering pays $300 cash for dividends.
Dec.		12		Smith Engineering receives $3,100 cash in advance of providing consulting services to a customer. The company's policy is to record fees collected in advance in a balance sheet account.
Dec.		13		Smith Engineering pays $2,500 cash (insurance premium) for a 24-month insurance policy. Coverage begins on December 1. The company's policy is to record all prepaid expenses in a balance sheet account.
Dec.		14		Smith Engineering pays $220 cash for supplies.
Dec.		15		Smith Engineering pays $405 cash for December utilities expense.
Dec.		16		Smith Engineering pays $750 cash in employee salary for work performed in the latter part of December.

1. General Journal Tab - For each transaction, prepare the required journal entry on the General Journal tab. List debits before credits.
2. General Ledger Tab - One of the advantages of general ledger software is that posting is done automatically. To see the detail of all transactions that affect a specific account, or the balance in an account at a specific point in time, click on the General Ledger tab.
3. Trial Balance Tab - General ledger software also automates the preparation of trial balances. A trial balance lists each account from the General Ledger, along with its balance, either a debit or a credit. Total debits should always equal total credits.
4. Income Statement Tab - The revenue and expense balances from the trial balance appear on the income statement, along with their balance as of the date selected. Review the income statement and indicate how the income statement is linked to the other financial statements.
5. Statement of Retained Earnings Tab - Beginning retained earnings plus (minus) net income (loss) for the period less dividends. Review the statement of Retained earnings and indicate how the statement is linked to the other financial statements.
6. Balance Sheet Tab - Each asset and liability account balance, as reported on the trial balance, appears on the balance sheet, along with the equity balance. Review the balance sheet and then indicate how the balance sheet is linked to the other financial statements.
7. Financial Statement Impact Tab - It is important to be able to identify the impact each transaction has on the financial statements. For each of the transactions, indicate the cumulative amount of net income, total assets, total liabilities and total equity that would appear on the financial statements immediately after each transaction is recorded.

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