Sandoval Gravel Company entered into each of the following transactions during 2018.Sandoval uses straight-line depreciation on building sand furniture, and the 200% declining balance method on equipment. Round all computations to the nearest dollar.

A. On January 1, Sandoval paid $16,000for a used John Deere 640R front end loader. The loader has a five-year useful life and a $2,500 estimated residual value.

B. On April 1, Sandoval spent $20,000 on a used construction trailer complete with furniture. The trailer had a fair value of $18,000, and the furniture a fair value of $6,000. The trailer has a useful life of five year with no residual value. The furniture has a useful life of four years and a $1,000 residual value.

C. On September 1, Sandoval acquired a two-acre site and a shed in exchange for a $350,000note payable due on September 1, 2025. Interest is payable quarterly beginning on December 1, 2019. Sandoval spent $43,000 clearing the land, demolishing the shed, and hauling away the debris.

D. On January 1, Sandoval paid $30,000 to recondition a bulldozer originally purchased for $100,000 on 1/1/15. The bulldozer had an estimated useful life of 8years and a $30,000 residual value. The reconditioning will extend the life by three years.

E. Scrapped a dump truck on 6/30/18for $750. The truck was purchased on 1/1/13 for $95,000. It had a six-year useful life and a $5,000 residual value.

F. On January 1, Sandoval paid $10,000 for a five-year license to store explosives on site. Legal fees and inspection costs related to the license totaled $4,500.

Required:

1)Prepare the journal entries to record each transaction.

2)Prepare any adjusting journal entries necessary at 12/31/18.

3)Show what would be reported on the 2018 income statement related to the above transactions.

4)Prepare the operating, investing and financing sections of the statement of cash flow for 2018.Show what would have been reported for each transaction. The operating section should be prepared under both the direct and indirect methods.

Sandoval Gravel Company entered into each of the following transactions during 2018.Sandoval uses straight-line depreciation on building sand furniture, and the 200% declining balance method on equipment. Round all computations to the nearest dollar.

A. On January 1, Sandoval paid $16,000for a used John Deere 640R front end loader. The loader has a five-year useful life and a $2,500 estimated residual value.

B. On April 1, Sandoval spent $20,000 on a used construction trailer complete with furniture. The trailer had a fair value of $18,000, and the furniture a fair value of $6,000. The trailer has a useful life of five year with no residual value. The furniture has a useful life of four years and a $1,000 residual value.

C. On September 1, Sandoval acquired a two-acre site and a shed in exchange for a $350,000note payable due on September 1, 2025. Interest is payable quarterly beginning on December 1, 2019. Sandoval spent $43,000 clearing the land, demolishing the shed, and hauling away the debris.

D. On January 1, Sandoval paid $30,000 to recondition a bulldozer originally purchased for $100,000 on 1/1/15. The bulldozer had an estimated useful life of 8years and a $30,000 residual value. The reconditioning will extend the life by three years.

E. Scrapped a dump truck on 6/30/18for $750. The truck was purchased on 1/1/13 for $95,000. It had a six-year useful life and a $5,000 residual value.

F. On January 1, Sandoval paid $10,000 for a five-year license to store explosives on site. Legal fees and inspection costs related to the license totaled $4,500.

Required:

1)Prepare the journal entries to record each transaction.

2)Prepare any adjusting journal entries necessary at 12/31/18.

3)Show what would be reported on the 2018 income statement related to the above transactions.

4)Prepare the operating, investing and financing sections of the statement of cash flow for 2018.Show what would have been reported for each transaction. The operating section should be prepared under both the direct and indirect methods.