KC Company began operations when it acquired \($30,000\) cash from the issue of common stock on January 1, 2005. The cash acquired was immediately used to purchase equipment for \($30,000\) that had a \($5,000\) salvage value and an expected useful life of four years. The equipment was used to produce the following revenue stream (assume all revenue transactions are for cash). At the beginning of the fifth year, the equipment was sold for \($4,500\) cash. KC uses straight-line depreciation.

Required:
Prepare income statements, statements of changes in stockholders’ equity, balance sheets, and statements of cash flows for each of the five years.

Transcribed Image Text:

2005 2006 2007 2008 2009 Revenue $7,500 $8,000 $8,200 $7,000 $0