The Blumer Company entered into the following transactions during 2012: 1. The company was started with $22,000 of common stock issued to investors for cash. 2. On July 1, the company purchased land that cost $15,500 cash. 3. There were $700 of supplies purchased on account. 4. Sales on account amounted to $9,500. 5. Cash collections of receivables were $5,500. 6. On October 1, 2012, the company paid $3,600 in advance for a 12-month insurance policy that became effective on October 1. 7. Supplies on hand as of December 31, 2010 amounted to $225. The adjusting entry necessary to record the supplies expense would result in a: $700 increase in assets and liabilities. $700 decrease in assets and equity. $475 decrease in assets and equity. $475 increase in assets and liabilities. The amount of insurance expense reported on the income statement for 2012 would be: $900. $2,400. $300. $600. The amount of cash flow from operating activities would be: $1,900. $8,400. $3,100. $5,400. The amount of total liabilities appearing on the December 31, 2012 balance sheet would be: $3,600. $4,000. $475. $700.