Cray Company started year 2 with $60,000 in its cash and common stock accounts. During year 2 Cray paid $45,000 cash for employee compensation. Assume this is the only transaction that occurred in year 2.
Required
a. Determine the total amount of assets at the end of year 2, assuming Cray is a manufacturing company and the employees were paid to make products.
b. Determine the amount of expense recognized on the year 2 income statement, assuming Cray is a manufacturing company and the employees were paid to make products.
c. Determine the total amount of assets at the end of year 2, assuming Cray is a service company.
d. Determine the amount of expense recognized on the year 2 income statement, assuming Cray is a service company.