Ryan Hope, controller of Hope, Inc., provides you with the following information concerning Hope during 2012. (Hope,

Question:

Ryan Hope, controller of Hope, Inc., provides you with the following information concerning Hope during 2012. (Hope, Inc. began operation on January 1, 2012.)

1. Issued 1,000 shares of common stock at $95 per share.

2. Paid $2,6000 per month to rent office and warehouse space. The rent was paid on the last day of each month.

3. Made total sales for services of $190,000: $65,000 for cash and $125,000 on account.

4. Purchased land for $32,000.

5. Borrowed $75,000 on December 31. The note payable matures in two years.

6. Salaries totaling $80,000 were paid during the year.

7. Other expenses totaling $40,000 were paid during the year.

8. $56,000 was received from customers as payment on account.

9. Declared and paid a dividend of $26,000.

REQUIRED:

a. Prepare journal entries for these transactions.

b. Establish T-accounts for each account, and post the journal entries to these T-accounts.

c. Prepare an income statement, statement of shareholders’ equity, a December 31, 2012, balance sheet, and statement of cash flows for 2012.

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... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...