Please answer Year 1: 1. Issues 70 shares of stock at $12 per share in cash. 2.
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Year 1: 1. Issues 70 shares of stock at $12 per share in cash. 2. Takes a loan for $350 in cash. The interest rate is 10% per year of the beginning balance. 3. Buys PP&E for $140 in cash. The PP&E has a useful life of three years and a salvage value of $50. It is depreciated on a straight-line basis. It is not used for manufacturing. 4. Buys inventory for $189 in cash. 5. Buys inventory of $277 on credit. 6. Prepays $98 in insurance for two years. The insurance expense is booked at the end of each year. 7. Books cash sales of $150. [COGS is booked later at the end of the year.] 8. Books credit sales of $400. [COGS is booked later at the end of the year.] 9. Receives $340 in cash as an advance from customers. 10. Pays $135 to employees as salary for the year. This is not related to manufacturing. 11. Employees earn a bonus of $45 for their work in Y1. The bonus is paid in cash in Y2. 12. The cost of goods sold for the year is $192. 13. Books depreciation expense for the year. 14. Books insurance expense for the year. 15. Books interest expense for the loan. Assume that the interest is paid in cash. Interest is 10% of the beginning balance. 16. Repays $100 of the loan principal. 17. Pays a cash dividend of 50 cents per share. 18. Buys back 10 shares of stock at the same price at which they were originally issued. Year 1: 1. Issues 70 shares of stock at $12 per share in cash. 2. Takes a loan for $350 in cash. The interest rate is 10% per year of the beginning balance. 3. Buys PP&E for $140 in cash. The PP&E has a useful life of three years and a salvage value of $50. It is depreciated on a straight-line basis. It is not used for manufacturing. 4. Buys inventory for $189 in cash. 5. Buys inventory of $277 on credit. 6. Prepays $98 in insurance for two years. The insurance expense is booked at the end of each year. 7. Books cash sales of $150. [COGS is booked later at the end of the year.] 8. Books credit sales of $400. [COGS is booked later at the end of the year.] 9. Receives $340 in cash as an advance from customers. 10. Pays $135 to employees as salary for the year. This is not related to manufacturing. 11. Employees earn a bonus of $45 for their work in Y1. The bonus is paid in cash in Y2. 12. The cost of goods sold for the year is $192. 13. Books depreciation expense for the year. 14. Books insurance expense for the year. 15. Books interest expense for the loan. Assume that the interest is paid in cash. Interest is 10% of the beginning balance. 16. Repays $100 of the loan principal. 17. Pays a cash dividend of 50 cents per share. 18. Buys back 10 shares of stock at the same price at which they were originally issued.
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Ending Balance Sheets Year 1 and Year 3 Assets Year 1 Year 3 Cash 69350 85767 Receivables 0 0 Invent... View the full answer
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