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Golden Manufacturing Company started operations by acquiring $119,000 cash from the issue of common stock. On January 1, Year 1, the company purchased equipment that
Golden Manufacturing Company started operations by acquiring $119,000 cash from the issue of common stock. On January 1, Year 1, the company purchased equipment that cost $109,000 cash, had an expected useful life of five years, and had an estimated salvage value of $10,900. Golden Manufacturing earned $98,460 and $60,520 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. Income Statement GOLDEN MANUFACTURING COMPANY Horizontal Statements Model Balance Sheet Equity Accumulated Common Retained Revenue + Depreciation Stock Earnings Assets Statement of Cash Flows Event Expense = Net Income Cash + Equipment Year 1 + = + = Issue stock Purchase equipment Revenue Depreciation expense Balance Year 2 Beg. bal. Revenue Depreciation expense End. bal. + + Prepare income statements for Year 1 and Year 2. (Do not round nearest dollar amount.). GOLDEN MANUFACTURING COMPANY Income Statements Year 1 Year 2 Prepare balance sheets for Year 1 and Year 2. (Do not round in dollar amount.). GOLDEN MANUFACTURING COMPANY Balance Sheets Year 1 Year 2 Assets Total Assets Stockholders' equity Total stockholders' equity GOLDEN MANUFACTURING COMPANY Statements of Cash Flows Year 1 Year 2 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Ending cash balance
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