Helen Parish started a design company on January 1, Year 1. On April 1, Year 1, Parish

Question:

Helen Parish started a design company on January 1, Year 1. On April 1, Year 1, Parish borrowed cash from a local bank by issuing a one-year $120,000 face value note with annual interest based on an 8 percent discount. During Year 1, Parish provided services for $72,000 cash.

Required
Answer the following questions.
a. What is the amount of total liabilities on the December 31, Year 1, balance sheet?
b. What is the amount of net income on the Year 1 income statement?
c. What is the amount of cash flow from operating activities on the Year 1 statement of cash flows?

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...

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