Hardt Corporation began business operations and experienced the following transa

Question

Hardt Corporation began business operations and experienced the following transactions during 2012:

1) Issued common stock for $10,000 cash.
2) Provided services to customers for $40,000 on account.
3) Incurred $18,000 of operating expenses on credit.
4) Collected $23,000 cash from customers.
5) Paid $15,000 on accounts payable.

Required:

a) Record the above transactions in a horizontal financial statements model to reflect their effect on Hardt's financial statements.

b) Prepare an income statement, balance sheet and statement of cash flows for 2012.

Explanation / Answer

Answer:

a)

b)

1 in $ in $ By Cash 10000 To Common Stock 10000 2 By Accounts receivable 40000 To Customer's Account 40000 3 By Operating expenses 18000 To Accounts payble 18000 4 By Cash 23000 To Accounts Receivable 23000 5 By Accounts Payble 15000 To Cash 15000

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