Question: The following transactions apply to Baker Co for 2010 its

The following transactions apply to Baker Co. for 2010, its first year of operations.
1. Issued $60,000 of common stock for cash.
2. Provided $128,000 of services on account.
3. Collected $113,200 cash from accounts receivable.
4. Loaned $12,000 to BBC on September 1, 2010. The note had a one-year term to maturity and an 8 percent interest rate.
5. Paid $28,000 of salaries expense for the year.
6. Paid a $2,000 dividend to the stockholders.
7. Recorded the accrued interest on December 31, 2010 (see item 4).
8. Uncollectible accounts expense is estimated to be 1 percent of sales on account.
a. Show the effects of the above transactions in a horizontal statements model like the one shown below.

b. Prepare the income statement, balance sheet, and statement of cash flows for2010.
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  • CreatedJanuary 03, 2012
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