Question
3. On March 1, 2019 An investor purchased 100 shares of stock (100%) from ABC Co. for $1,500,000 cash. The par value of the stock
3. On March 1, 2019 An investor purchased 100 shares of stock (100%) from ABC Co. for $1,500,000 cash. The par value of the stock was $1/share. ABC Company purchased equipment for $90,000; paying $40,000 and financing (through a long-term note) the remaining portion. The note charges 12% (APR) interest. ABC had the following transactions after 3/1/2019: Sold and delivered services for $820,000. $460,000 cash was received immediately and the remaining amounts will be received in 2020. ABC was given in cash $60,000 for future services. The services are to be provided to the client in 2020. ABC paid $50,000 for advertising. The advertising was already displayed and incurred. ABC paid $100,000 for supplies. Cash was paid for both. Paid salaries in total of $200,000 for work already done. ABC received a $20,000 bill for utilities it had used in 2019. The bill will be paid in 2020. The amount of depreciation that needs to be recorded for the equipment (related to above) is $9,000. The new person counted supplies and determined that only$20,000 of supplies remained at year-end. ABC declared and paid a dividend of $20,000. The tax rate is 20% but the tax will not be paid until 2020. Prepare JEs, a balance sheet and Income Statement in good form for the year-ended 2019 for ABC Co. Round all non-round values to the nearest dollar.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started