Question

Following are transactions for Security Company for 2010:
a. The owners started the business as a corporation by contributing $50,000 cash in exchange for common stock.
b. Security Company purchased office equipment for $5,000 cash and land for $15,000 cash.
c. The company earned a total of $32,000 of revenue of which $20,000 was collected in cash.
d. The company purchased $550 worth of supplies for cash.
e. The company paid $6,000 in cash for other operating expenses.
f. At the end of the year, Security Company owed employees $3,600 for work that the employees had done in 2010. The next payday, however, is not until January 4, 2011.
g. Only $120 worth of supplies was left at the end of the year.
h. The office equipment was purchased on January 1 and is expected to last for five years. There is no expected salvage value, and the company wants equal amounts of depreciation expense each year related to this equipment.

Requirements
1. Use an accounting equation worksheet to record the transactions that occurred during 2010.
2. Record any adjustments needed at year end.
3. Prepare the income statement, statement of changes in shareholders’ equity, and the statement of cash flows for the year ended December 31, 2010, and the balance sheet at December 31, 2010.



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  • CreatedSeptember 01, 2014
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