Question
Assume cash transaction in year X1 unless otherwise noted. 1/1 An Investor acquired 100% of Crazys stock with an investment of $800,000 cash. Par value
Assume cash transaction in year X1 unless otherwise noted.
1/1 An Investor acquired 100% of Crazys stock with an investment of $800,000 cash. Par value of stock was 20.00/share and a thousand shares were sold
1/1 Crazy borrowed $250,000 cash by issuing a 3-year note with a stated interest rate of 8% per year. To be compounded annually. The interest will be paid on January 1 of each year (starting next year); and the principal will be paid on maturity
1/1 Prepaid three years of rent for $48,000 (cash).
1/15 Purchased office equipment for $50,000 and supplies for $31,000
2/7 Received $180,000 cash for consulting, services to be performed in the future for client X
3/1 Started up a second line of consulting services. Sold and received $300,000 in total for the year in consulting services and paid related misc. expenses of $350,000. This summarizes all revenues and expense of business #2. All in cash. Purchased a machine for business 2 for $40,000 cash.
7/1 Prepaid $48,000 cash for a 12-month insurance policy (starting on 7/1)
8/1 Borrowed a $300,000 in cash from bank. Stated rate of interest is 6%. Principal and interest due July, 31, year 2 ( or we can say next year)
9/12 Purchased $15,000 more of supplies on credit
9/16 Provided consulting services of $60,000 on credit to client Y from the main (first line) consulting service division.
10/1 Purchased $18,000 (with cash) of an investment in another companys (Pear Inc.) stock. Purchased $25,000 in bonds of Pear (not considered trading)
10/20 Collected $5,000 from client Y.
10/21 Delivered $150,000 for services delivered to Client ZA on account.
10/31 80% of the services for client X are performed.
12/1 Decided to sell second line of consulting business. Found a buyer for second line of consulting services. Sold the business in exchange for $20,000 cash, the business and the machine (3/1) was sold. This resulted in a loss of $20,000.
12/15 Paid down the payable (supplies) with a $5,000 cash payment. We received $100,000 cash from Client ZA.
12/31 Counted supplies and determined that $6,000 of supplies were still on hand
12/31 Total salaries paid in year equaled $45,000. Remaining salaries are to be paid on January 1, second year. The total amount of current year expense is $65,000.
12/31 Determined appropriate total depreciation is $10,000
12/31 Determined that the stock purchased on 10/1 was now worth $16,000. However, the stock was not sold. Determined the bonds were worth 12,000.
12/31 We declared and paid a dividend of $15,000 to our investor
12/31 We received cash of $3,000 in dividends from Pear Inc. We received $1,000 in interest from bonds.
Tax Rate is 21% (none of the tax is paid, but it is accrued as a liability)
- ). Prepare Income Statement (including OCI). Prepare closing entrie
I have a prepared income statement but it doesn't let me post here, I know I made a mistake and I'm trying to find out what it is
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