The following transactions apply to Hooper Co. for 2018, its first year of operations:
1. Issued $60,000 of for cash.
2. Provided $90,000 of services on account.
3. Collected $78,000 cash from accounts receivable.
4. Loaned $20,000 to Mosby Co. on November 30, 2018. The note had a one-year term to and a 6 percent interest rate.
5. Paid $26,000 of salaries expense for the year.
6. Paid a $2,000 to the stockholders.
7. Recorded the accrued interest on December 31, 2018 (see item 4).
8. Estimated that 1 percent of service revenue will be uncollectible.
Required
a. Show the effects of these transactions in a horizontal statements model like the one shown as follows.
b. Prepare the income statement, balance sheet, and statement of cash flows for 2018.
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