Hinds Company started operations by acquiring $120,000 cash from the issue of common stock. On January 1, Year 1, the company purchased equipment that cost $110,000 cash. The equipment had an expected useful life of five years and an estimated salvage value of $10,000. Hinds Company earned $85,000 and $72,000 of cash revenue during Year 1 and Year 2, respectively. Hinds Company uses double-declining-balance depreciation.

Required
a. Record the previous transactions in a horizontal statements model like the following one:

b. Prepare income statements, balance sheets, and statements of cash flows for Year 1 and Year 2.

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Balance Sheet Statement Income Statement Stk. Equlty Cash + Book Value of Equlp. = Com. Stk. + Ret. Earn. Assets of Cash Flows Event Exp. Net Inc. Rev.