Clean Spot, Inc., started year 3 with $42,000 in its cash and common stock accounts. During year

Question:

Clean Spot, Inc., started year 3 with $42,000 in its cash and accounts. During year 3, Clean Spot paid $34,000 cash for employee compensation.

Required
Based on this information alone,
a. Determine the total amount of assets at the end of year 3, assuming Clean Spot is a manufacturing company and the employees were paid to make products.
b. Determine the amount of expense recognized on the year 3 income statement, assuming Clean Spot is a manufacturing company and the employees were paid to make products.
c. Determine the total amount of assets at the end of year 3, assuming Clean Spot is a service company.
d. Determine the amount of expense recognized on the year 3 income statement, assuming Clean Spot is a service company.

Common Stock
Common 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...