Question: Northeast Termite Specialists Inc was started when its owners invested
Northeast Termite Specialists, Inc., was started when its owners invested $32,685 in the business in exchange for common stock on July 1, 2010. Part of the cash received to start the company was immediately used to purchase a $19,875 high-pressure chemical sprayer, which had a $2,875 residual value and an expected useful life of 10 years. The company earned $68,315 of cash revenue during the year and had cash operating expenses of $27,205. Prepare an income statement, statement of changes in shareholders’ equity, and statement of cash flows for the year ended June 30, 2011, and a balance sheet at June 30, 2011.
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