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In: Accounting

The following transactions apply to Hooper Co. for 2018, its first year of operations: Issued $100,000...

The following transactions apply to Hooper Co. for 2018, its first year of operations:

  1. Issued $100,000 of common stock for cash.
  2. Provided $98,000 of services on account.
  3. Collected $84,000 cash from accounts receivable.
  4. Loaned $13,000 to Mosby Co. on November 30, 2018. The note had a one-year term to maturity and a 8 percent interest rate.
  5. Paid $36,000 of salaries expense for the year.
  6. Paid a $3,500 dividend 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.
  1. Show the effects of these transactions in a horizontal statements model like the one shown below. (Enter any decreases to account balances with a minus sign. If there is no effect on the Statement of Cash Flow, leave the cell blank.)
HOOPER CO.
Horizontal Statements Model
Event No. Assets = Equity Income Statement Statement of Cash Flow
Cash + Accounts Receivable – Allowance for Doubtful Accounts + Notes Receivable + Interest Receivable = Common Stock + Retained Earnings Revenue – Expense = Net Income
1. not attempted + not attempted – not attempted + not attempted + not attempted = not attempted + not attempted not attempted – not attempted = not attempted not attempted not attempted
2. not attempted + not attempted – not attempted + not attempted + not attempted = not attempted + not attempted not attempted – not attempted = not attempted not attempted not attempted
3. not attempted + not attempted – not attempted + not attempted + not attempted = not attempted + not attempted not attempted – not attempted = not attempted not attempted not attempted
4. not attempted + not attempted – not attempted + not attempted + not attempted = not attempted + not attempted not attempted – not attempted = not attempted not attempted not attempted
5. not attempted + not attempted – not attempted + not attempted + not attempted = not attempted + not attempted not attempted – not attempted = not attempted not attempted not attempted
6. not attempted + not attempted – not attempted + not attempted + not attempted = not attempted + not attempted not attempted – not attempted = not attempted not attempted not attempted
7. not attempted + not attempted – not attempted + not attempted + not attempted = not attempted + not attempted not attempted – not attempted = not attempted not attempted not attempted
8. not attempted + not attempted – not attempted + not attempted + not attempted = not attempted + not attempted not attempted – not attempted = not attempted not attempted not attempted
Total 0 + 0 – 0 + 0 + 0 = 0 + 0 0 – 0 = 0 0
  1. Prepare the income statement, balance sheet, and statement of cash flows for 2018.
HOOPER CO.
Income Statement
For the Year Ended December 31, 2018
not attempted not attempted
Operating expenses
not attempted not attempted
not attempted not attempted
not attempted not attempted
Total operating expenses 0
not attempted not attempted
Non-Operating Items
not attempted not attempted not attempted
not attempted not attempted not attempted
not attempted
HOOPER CO.
Balance Sheet
As of the End of the Year 2018
Assets
not attempted not attempted
not attempted not attempted
not attempted not attempted 0
not attempted not attempted not attempted
not attempted not attempted not attempted
not attempted not attempted not attempted
Total assets 0
Liabilities not attempted
Stockholders’ equity
not attempted not attempted
not attempted not attempted
not attempted not attempted
Total stockholders’ equity 0
Total liabilities and stockholders’ equity $0

Solutions

Expert Solution

a.

b.

c.

ekkarill92 answered 2 years ago
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