Exercise 8-8A Effect of double-declining-balance depreciation on financial statements LO 8-3 Golden Manufacturing Company started operations by acquiring $85,000 cash from the issue of common stock. On January 1, Year 1, the company purchased equipment that cost $75,000 cash, had an expected useful life of five years, and had an estimated salvage value of $7,500. Golden Manufacturing earned $97,180 and $68,780 of cash revenue during Year 1 and Year 2 respectively. Golden Manufacturing uses double-declining-balance depreciation. Required a. Record the purchase in a horizontal statements model. b-1. Prepare income statements for Year 1 and Year 2. b-2. Prepare balance sheets for Year 1 and Year 2. b-3. Prepare statements of cash flows for Year 1 and Year 2. Complete this question by entering your answers in the tabs below. Red A Req B1 Inc Sumt Reg B2 Bal Req B3 Stmt Sheet Cash Record the purchase in a horizontal statements model. (In the Cash Flow column, indicate wh operating activity (OA), an investing activity (IA), a financing activity (FA) and net change in decreases to account balances and cash outflows with a minus sign. Do not round intermediat final answers to nearest dollar amount. Not all cells in the "Cash Flow" column may require an there is no corresponding input needed.) GOLDEN MANUFACTURING COMPANY Horizontal Statements Madel Balance Sheet Income Statement Assets Equity Accumulated Retained Equipment - Common Revenge - Expense - Net Income Depreciation Stock Earning Staterent af Cash Flows Event Cash Year 1 Issue stock Purchase equipment Revenue Depreciation expense Balance Year 2 + 0. 0 D O 0 0 Beg bar Revenue Depreciation expense End, bal 0. 0 0 0 0 Exercise 8-8A Effect of double-declining balance depreciation on financial statements LO 8-3 Golden Manufacturing Company started operations by acquiring 585,000 cash from the issue of common stock. On January 1, Year 1. the company purchased equipment that cost $75,000 cash, had an expected useful life of five years, and had an estimated salvage value of $7,500. Golden Manufacturing earned $97.180 and $68,780 of cash revenue during Year 1 and Year 2. respectively. Golden Manufacturing uses double-declining- balance depreciation Required a. Record the purchase in a horizontal statements model b-1. Prepare income statements for Year 1 and Year 2 b-2. Prepare balance sheets for Year 1 and Year 2 b-3. Prepare statements of cash flows for Year 1 and Year 2 Complete this question by entering your answers in the tabs below. Reg A Req B1 Inc Stmt Req B2 Bal Rea B3 Stmt Sheet Cash Record the purchase in a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), an ir cash (NC). Enter any decreases to account balances and cash outfiows with a minus sign. Do not round intermediate calculations. Round the fi Flow" column may require an input - leave cells blank if there is no corresponding input needed.) GOLDEN MANUFACTURING COMPANY Horizontal Statements Model Balance Sheet Income Statement Assets Sta Event Common Equity Retained Earnings Revenue Expense = Net Income Cash Accumulated Depreciation Equipment Stock Year 1 Issue stock Purchase equipment Revenue Depreciation expense Balance Year 2 Beg bal Revenue Depreciation expense End, bal Reg 1 inc Sim >
