Classic.Motors Inc., was formed on January 1 , 2 0 2 1 . The following transactions occurred
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Classic.Motors Inc., was formed on January The following transactions occurred during :
Read the requirements.
Sales revenue
Expenses:
Requirement Prepare Classic's balance sheet at December
Classic Motors, Inc.
Balance Sheet
December
Property, plant, and equipment:
Equipment
Less: Accumulated depreciation
Accumulated depreciation
Current liabilities:
Accounts payable
Salary payable
Total current liabilities
Stockholders' equity
Common stock
Retained earnings
Total stockholders' equity
More info
On January Classic issued its common stock for $ Early in January,
Classic made the following cash payments:
a $ for equipment
b $ for inventory nine cars at $ each
c $ for rent on a store building
In February, Classic purchased three cars for inventory on account. The cost of this
inventory was $ $ per car Before yearend, the company paid off
$ of this debt. The company uses the firstin firstout FIFO method to account
for its inventory.
During Classic sold eleven autos for a total of $ Before yearend, it
had collected of this amount.
The business employs two people. The combined annual payroll is $ of
which Classic owes $ at yearend. At the end of the year, the company paid income
taxes of $
Late in Classic declared and paid cash dividends of $
For equipment, Classic uses the straightline depreciation method, over five years,
with zero residual value.
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