The following transactions apply to Baker Corporation 1. Issued common stock for

Question

The following transactions apply to Baker Corporation

1. Issued common stock for $20,000 cash

2. Provided services to customers for $60,000 on account

3. Borrowed $15,000 on September 1 at 8% interest with a one year term.

4. Purchased supplies for $6,0000 cash

5. Paid $12,000 wages to employees

6. Paid $11,000 for other operating expenses

7. Collected $14,000 cash from customers

8. Recorded interest on the note payable at year end

Required:

Prepare the income statement, balance sheet, and statement of cash flow.

Explanation / Answer

Income statement

2)Balance sheet:

cash flow statement:

Revenue 60000 less: wage expense - 12000 operating expense -11000 Interest    (15000 * .08 * 4/12 ) - 400 net income 36600

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