Bensen Company started business by acquiring $27,500 cash from the issue of common stock on January 1, Year 1. The cash acquired was immediately used to purchase equipment for $27,500 that had a $3,500 salvage value and an expected useful life of four years. The equipment was used to produce the following revenue stream (assume that all revenue transactions are for cash). At the beginning of the fifth year, the equipment was sold for $4,090 cash. Bensen uses straight-line depreciation. Year 1 Year 2 $7,750 $8,250 Year 3 $8,450 Year 4 $7,250 Year 5 $0 Revenue Required Prepare income statements, statements of changes in stockholders' equity, balance sheets, and statements of cash flows for each of the five years. Present the statements in the form of a vertical statements model. Complete this question by entering your answers in the tabs below.

Bensen Company started business by acquiring $27,500 cash from the issue of common stock on January 1, Year 1. The cash acquired was immediately used to purchase equipment for $27,500 that had a $3,500 salvage value and an expected useful life of four years. The equipment was used to produce the following revenue stream (assume that all revenue transactions are for cash). At the beginning of the fifth year, the equipment was sold for $4,090 cash. Bensen uses straight-line depreciation. Year 1 Year 2 $7,750 $8,250 Year 3 $8,450 Year 4 $7,250 Year 5 $0 Revenue Required Prepare income statements, statements of changes in stockholders' equity, balance sheets, and statements of cash flows for each of the five years. Present the statements in the form of a vertical statements model. Complete this question by entering your answers in the tabs below.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Bensen Company started business by acquiring $26,900 cash from the issue of common stock on January 1, Year 1. The cash acquired was immediately used to purchase equipment for $26,900 that had a $4,500 salvage value and an expected useful life of four years. The equipment was used to produce the following revenue stream (assume that all revenue transactions are for cash). At the beginning of the fifth year, the equipment was sold for $4,950 cash. Bensen uses straight-line depreciation. Revenue Year 1 $ 7,820 Year 2 $ 8,320 Year 3 $ 8,520 Year 4 $ 7,320 Year 5 $ 0 Required Prepare income statements, statements of changes in stockholders' equity, balance sheets, and statements of cash flows for each of the five years. Complete this question by entering your answers in the tabs below. Statement of Income Statement Statement of Changes in Balance Sheet Stockholders Cash Flows Prepare the statements of cash flows for each of the five years. Note: Amounts to be deducted and cash outflows…
Bobby's sandwiches started business by acquiring $24700 cash from the issue of common stock on January 1 year 1 .The cash acquired was immediately used to purchase equipment for $24700 that had a $3900 salvage value and an expected useful life of four years. The equipment was used to produce the following revenue stream (assume that all revenue transactions are for cash) . At the beginning of the fifth year the equipment was sold for $4480 cash. Bobby uses straight line depreciation Revenue:- Year 1 -$7960 Year 2 -$8460 Year 3 -$8660 Year 4 -$7460 Year 5 - $0 Required Prepare income statements, statements of changes in stockholder's equity, balance sheets and statements of cash flows for each of the five years . Present the statements in the form of a vertical statements model
Rundle Manufacturing Company was started on January 1, Year 1, when it acquired $76,000 cash by issuing common stock. Rundle immediately purchased office furniture and manufacturing equipment costing $8,400 and $33,200, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of four years. The company paid $11,300 for salaries of administrative personnel and $15,500 for wages to production personnel. Finally, the company paid $13,390 for raw materials that were used to make inventory. All inventory was started and completed during the year. Rundle completed production on 4,700 units of product and sold 3,750 units at a price of $15 each in Year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Required Determine the total product cost and the average cost per unit of the inventory produced in Year 1.…
Thornton Manufacturing Company was started on January 1, year 1, when it acquired $89,000 cash by issuing common stock. Thornton immediately purchased office furniture and manufacturing equipment costing $9,100 and $32,600, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,800 salvage value and an expected useful life of four years. The company paid $11,200 for salaries of administrative personnel and $15,900 for wages to production personnel. Finally, the company paid $10,500 for raw materials that were used to make inventory. All inventory was started and completed during the year. Thornton completed production on 4,200 units of product and sold 3,290 units at a price of $15 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.)
Franklin Manufacturing Company was started on January 1, year 1, when it acquired $81,000 cash by issuing common stock. Franklin immediately purchased office furniture and manufacturing equipment costing $7,700 and $24,900, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,600 salvage value and an expected useful life of three years. The company paid $11,200 for salaries of administrative personnel and $15,500 for wages to production personnel. Finally, the company paid $16,110 for raw materials that were used to make inventory. All inventory was started and completed during the year. Franklin completed production on 4,900 units of product and sold 3,970 units at a price of $15 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Required a. Determine the total product cost and the average cost per unit of the inventory produced in…
Stuart Manufacturing Company was started on January 1, Year 1, when it acquired $83,000 cash by issuing common stock. Stuart immediately purchased office furniture and manufacturing equipment costing $7,700 and $26,400, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,000 salvage value and an expected useful life of three years. The company paid $11,700 for salaries of administrative personnel and $15,100 for wages to production personnel. Finally, the company paid $17,280 for raw materials that were used to make inventory. All inventory was started and completed during the year. Stuart completed production on 4,900 units of product and sold 3,980 units at a price of $16 each in Year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Required a. Determine the total product cost and the average cost per unit of the inventory produced in Year 1.…
Stuart Manufacturing Company was started on January 1, year 1, when it acquired $89,000 cash by issuing common stock. Stuart immediately purchased office furniture and manufacturing equipment costing $32,000 and $40,000, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of six years. The company paid $12,000 for salaries of administrative personnel and $21,000 for wages to production personnel. Finally, the company paid $26,000 for raw materials that were used to make inventory. All inventory was started and completed during the year. Stuart completed production on 10,000 units of product and sold 8,000 units at a price of $9 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Determine the amount of net income that would appear on the year 1 income statement. Determine the amount of…
Stuart Manufacturing Company was started on January 1, year 1, when it acquired $89,000 cash by issuing common stock. Stuart immediately purchased office furniture and manufacturing equipment costing $32,000 and $40,000, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of six years. The company paid $12,000 for salaries of administrative personnel and $21,000 for wages to production personnel. Finally, the company paid $26,000 for raw materials that were used to make inventory. All inventory was started and completed during the year. Stuart completed production on 10,000 units of product and sold 8,000 units at a price of $9 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.)Required. Determine the amount of total assets that would appear on the December 31, year 1, balance sheet.
Stuart Manufacturing Company was started on January 1, year 1, when it acquired $89,000 cash by issuing common stock. Stuart immediately purchased office furniture and manufacturing equipment costing $32,000 and $40,000, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $4,000 salvage value and an expected useful life of six years. The company paid $12,000 for salaries of administrative personnel and $21,000 for wages to production personnel. Finally, the company paid $26,000 for raw materials that were used to make inventory. All inventory was started and completed during the year. Stuart completed production on 10,000 units of product and sold 8,000 units at a price of $9 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Required a. Determine the total product cost and the average cost per unit of the inventory produced in year 1.…
Solomon Manufacturing Company was started on January 1, year 1, when it acquired $83,000 cash by issuing common stock. Solomon immediately purchased office furniture and manufacturing equipment costing $9,100 and $24,800, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,800 salvage value and an expected useful life of three years. The company paid $11,500 for salaries of administrative personnel and $15,000 for wages to production personnel. Finally, the company paid $15,000 for raw materials that were used to make inventory. All inventory was started and completed during the year. Solomon completed production on 5,000 units of product and sold 4,100 units at a price of $14 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Required Determine the total product cost and the average cost per unit of the inventory produced in year 1.…
The company bought a machine for $40, 000 in January year 1. The machine had an expected useful life of six years and an expected residual value of $10,000. The machine was depreciated on the straight line basis where a full year's charge is made in the year of purchase and none in the year of sale. In December year 4, the machine was sold for $ 15,000. The company has a policy in its internal accounts of combining the depreciation charge with the profit or loss on disposal of assets. Its year end is 31 December. What is the total amount of profit/loss charged to the statement of profit or loss over the life of the machine?
The corporation purchased a machine for 1 million. Freight and installation charges amounted to 3% of the purchase price. If the machine shall be depreciated over a period of 8 years with a salvage value of 12%. Determine the depreciation charged during the 5th year using the sum of the year's digit method