Question: The following transactions apply to Cheng Co for 2016 its

The following transactions apply to Cheng Co. for 2016, its first year of operations:
1. Issued $60,000 of common stock for cash.
2. Provided $94,000 of services on account.
3. Collected $84,500 cash from accounts receivable.
4. Loaned $10,000 to Swan Co. on October 1, 2016. The note had a one-year term to maturity and a 6 percent interest rate.
5. Paid $41,000 of salaries expense for the year.
6. Paid a $3,000 dividend to the stockholders.
7. Recorded the accrued interest on December 31, 2016.
8. Determined that $990 of accounts receivable were uncollectible. The company uses the direct write-off method.
a. Record the above transactions in general journal form.
b. Post the entries to T-accounts.
c. Prepare the income statement, balance sheet, and statement of cash flows for 2016.
d. Show the effects of the above transactions in a horizontal statements model like the one shown below.

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  • CreatedApril 20, 2015
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