1. What did Donahoo’s balance sheet look like at the outset of the firm’s life?
2. What did the firm’s balance sheet look like after each transaction?
3. Ignoring taxes, determine how much income Donahoo earned during January. Prepare an income statement for the month. Recognize an interest expense of 1 percent for the month (12 percent annually) on the $500,000 long-term debt, which has not been paid but is owed.
4. What was Donahoo’s cash flow for the month of January?