The following transactions pertain to ALFA Solutions, Inc. Assume the transactions for the purchase of the computer and any capital improvements occur on January 1 each year.

2010

1. Acquired $50,000 cash from the issue of common stock.

2. Purchased a computer system for $30,000. It has an estimated useful life of five years and a $5,000 salvage value.

3. Paid $2,000 sales tax on the computer system.

4. Collected $40,000 in data entry fees from clients.

5. Paid $1,800 in fees to service the computers.

6. Recorded double-declining-balance depreciation on the computer system for 2010.

2011

1. Paid 1,000 for repairs to the computer system.

2. Bought a case of toner cartridges for the printers that are part of the computer system, $1,500.

3. Collected $38,000 in data entry fees from clients.

4. Paid $1,100 in fees to service the computers.

5. Recorded double-declining-balance depreciation for 2011.

2012

1. Paid $4,800 to upgrade the computer system, which extended the total life of the system to six years.

2. Paid $1,100 in fees to service the computers.

3. Collected $35,000 in data entry fees from clients.

4. Recorded double-declining-balance depreciation for 2012.

Required

a. Record the above transactions in a horizontal statements model like the following one.

b. Use a vertical model to present financial statements for 2010, 2011, and2012.

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Balance Sheet Income Statement Statemt. of Event Assets Equity Rev FxpNet Inc Cash Flaws Com. Stock + Earn. Ret. Cash + Equip, -A, Dept.