The following transactions apply to Baker Co. for 2010, its first year of operations. 1. Issued $60,000
Question:
The following transactions apply to Baker Co. for 2010, its first year of operations.
1. Issued $60,000 of common stock for cash.
2. Provided $128,000 of services on account.
3. Collected $113,200 cash from accounts receivable.
4. Loaned $12,000 to BBC on September 1, 2010. The note had a one-year term to maturity and an 8 percent interest rate.
5. Paid $28,000 of salaries expense for the year.
6. Paid a $2,000 dividend to the stockholders.
7. Recorded the accrued interest on December 31, 2010 (see item 4).
8. Uncollectible accounts expense is estimated to be 1 percent of sales on account.
Required
a. Show the effects of the above transactions in a horizontal statements model like the one shown below.
.png)
b. Prepare the income statement, balance sheet, and statement of cash flows for2010.
Common StockCommon stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
Step by Step Answer:
a Baker Co Horizontal Statements Model Balance Sheet Income Statement Statement of Event Assets Equity Rev Exp Net Inc Cash Flows Cash Accts Rec Allow ...View the full answer
