FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Company ABC began its operations on January 2, 2022. The company had the following transactions during 2022:
1. On January 4, the company issued 120,000 shares of common stock to a group of investors for $3.00 per share with par value of $0.45 per share.
2. On May 1, it borrowed $20,000 from Bank of America, with interest rate of 12%. Interest on the loan is due on March 31, 2023, which is also the due date of the loan.
3. On July 1, the company acquired a new wireless networking equipment. The list price was $80,000. Because the company agreed to pay cash, it qualified for a discount of 8%. Payments for necessary transportation, software, licenses, and installation totaled $4,400. The company estimated a useful life of 5 years and a residual value of $8,000 for the equipment and used straight-line
4. In December, the company declared a dividend of $0.03 per share, payable on April 15, 2023.
5. For the year, the company received cash payment of $137,000 from its customers. On December 31, 2022, customers still owed a total of $54,000 to the company.
6. Inventories purchased on account totaled $79,000 for 2022. Cash payments to the inventory supplier totaled $55,000, including inventories purchased for cash of $34,000. On December 31, 2022, the company had inventory of $29,000 on hand.
7. Payment of wages and salaries totaled $58,000 for the year. On December 31, 2022 the company owed its employees $7,400.
8. As a new business during the year of 2022, the company is exempt from both federal and state income taxes.
REQUIRED:
1. Use an excel spreadsheet to prepare
2. Prepare properly formulated (a) income statement and (b)
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