Next, construct the balance sheet for EconDisaster.com for December 31, 2008. The company had no assets at
Question:
Next, construct the balance sheet for EconDisaster.com for December 31, 2008. The company had no assets at the beginning of the year. The owners contributed $10,000 of start-up capital and obtained common stock. Net income and retained earnings can be calculated from question 7.
Reference question 7
In 2008, a fictitious software company named EconDisaster.com sold $7000 worth of a game called “Global Financial Meltdown.” The company had salaries of $1000, rent of $500, and electricity use of $500, and it purchased a computer for $5000. The company uses straight-line depreciation with a lifetime of 5 years (this means that depreciation is calculated as the historical cost divided by the lifetime). It pays a corporation tax of 25 percent on profits and paid no dividends. Construct its income statement for 2008 based on Table 7-6.
Reference Table 7-6
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain