Question
Please provide a cash flow statement, income statement, and balance sheet. Thank you Year 1 The following list summarizes the transactions that took place during
Please provide a cash flow statement, income statement, and balance sheet. Thank you
Year 1
The following list summarizes the transactions that took place during a start ups first year of operations. Using the information below, prepare a list of the appropriate journal entries, including any necessary adjusting entries, and create a Balance Sheet and Income Statement. Once you have created the financial statements, provide the appropriate closing entries and cash flow statements. The startup uses straight line when depreciating long-term assets and a perpetual inventory system. It has an estimated tax rate of 35%.
Please round all numbers to the nearest dollar.
- Jan 1st, issued 500 shares of common stock ($0.10 par value) for $50,000.
- Feb 1st, paid $25,000 to purchase equipment (estimated useful life 10 years; salvage value = 1,540).
- Feb 28th, issued 100 shares of common stock ($0.10 par value) for $20,000.
- June 30th, paid $175,000 for land by signing a 5 year Note Payable, promising to pay 5% interest on June 30th of each of those 5 years.
- July 1st purchased 500 units of inventory at $15 each. $2,000 was paid in cash, the rest was on account.
- July 30th sold 220 units of inventory for $63 each on account. The inventory came with a 1-year warranty. The company expects that providing the warranty will cost 1% of the sales made.
- Aug 2nd, incurred $450 of wages expense.
- Aug 5th, collected $2500 of accounts receivable.
- Aug 31st paid $450 of wages payable.
- Sept 4th paid $1600 of accounts payable.
- Dec 31st, incurred and paid $2,000 of utility expense.
- Dec 31st, Purchased a second piece of equipment for $4,100 (estimated useful life 12 years, salvage value 2,000).
- Dec 31st, Purchased a copyright for $10,000. The copyright has a 20-year useful life and no residual value.
- The company relies on the percentage of credit sales method and expects that 2% of credit sales will be uncollectible.
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