Required information

$[$The following information applies to the questions displayed below.$]$

Vernon Company began operations on January $1,$ year $1,$ by issuing common stock for $$39,000$ cash. During year $1,$ Vernon

received $$56,200$ cash from revenue and incurred costs that required $$37,200$ of cash payments.

Prepare a GAAP$-$based income statement and balance sheet for Vernon Company for year $1$ under the following scenario:

b$.$ Vernon is in the car rental business. The $$37,200$ was paid to purchase automobiles. The automobiles were purchased on January $1,$

year $1,$ and have three$-$year useful lives, with no expected salvage value. Vernon uses straight$-$line depreciation. The revenue was

generated by leasing the automobiles.

Complete this question by entering your answer in the tabs below.

Income

Balance Sheet

Prepare an Income Statement.