Golden Manufacturing Company started operations by acquiring $111,000 cash from

Question

Golden Manufacturing Company started operations by acquiring $111,000 cash from the issue of common stock. On January 1, 2018, the company purchased equipment that cost $101,000 cash, had an expected useful life of five years, and had an estimated salvage value of $10,100. Golden Manufacturing earned $99,310 and $69,480 of cash revenue during 2018 and 2019, respectively. Golden Manufacturing uses double-declining-balance depreciation.

Required

Record the purchase in a horizontal statements model.

b-1. Prepare an income statements for 2018 and 2019. Use a vertical statements format.

b-2. Prepare a balance sheets for 2018 and 2019. Use a vertical statements format.

b-3. Prepare a statements of cash flows for 2018 and 2019. Use a vertical statements format.

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Typewritten answers only, please. No handwritten answers. Thank you.

Typewritten answers only, please. No handwritten answers. Thank you.

Explanation / Answer

Assets Equity Accumulated Common Retained Event Cash + Equipment - Depreciation = stock + Earnings Revenue - Expense Cash flow statement 2018 Issue stock 111000 111000 111000 Financing Purchase equipment -101000 101000 -101000 Investing Revenue 99310 99310 99310 99310 Operating Depreciation expense -40400 -40400 -40400 Balance 109310 101000 -40400 111000 58910 99310 -40400 2019 Beg. Balance 109310 101000 -40400 111000 58910 revenue 69480 69480 69480 69480 Operating Depreciation expense -24240 -24240 -24240 End balance 178790 101000 -40400 111000 128390

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