The following transactions apply to Pecan Co. for 2018, its first year of operations: Received $35,000...

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

Received $35,000 cash in exchange for issuance of common stock.
Secured a $117,000 ten-year installment loan from State Bank. The interest rate is 7 percent and annual payments are $16,296.
Purchased land for $27,000.
Provided services for $80,000.
Paid other operating expenses of $40,000.
Paid the annual payment on the loan.

Required

Organize the transaction data in accounts under an accounting equation.
Prepare an income statement and balance sheet for 2018.
What is the interest expense for 2019? 2020?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

The following transactions apply to Pecan Co. for Year 1, its first year of operations: Received...

The following transactions apply to Pecan Co. for Year 1, its first year of operations: Received $38,000 cash in exchange for issuance of common stock. Secured a $101,000 ten-year installment loan from State Bank. The interest rate is 6 percent and annual payments are $13,723. Purchased land for $20,000. Provided services for $115,000. Paid other operating expenses of $39,000. Paid the annual payment on the loan. Required Organize the transaction data in accounts under an accounting equation. Prepare an income...

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: Issued $100,000 of common stock for cash. Provided $98,000 of services on account. Collected $84,000 cash from accounts receivable. 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. Paid $36,000 of salaries expense for the year. Paid a $3,500 dividend to the stockholders. Recorded the accrued interest on December 31, 2018 (see...

The following transactions apply to Hooper Co. for Year 1, its first year of operations: Issued...

The following transactions apply to Hooper Co. for Year 1, its first year of operations: Issued $170,000 of common stock for cash. Provided $96,000 of services on account. Collected $84,000 cash from accounts receivable. Loaned $11,000 to Mosby Co. on November 30, Year 1. The note had a one-year term to maturity and a 6 percent interest rate. Paid $44,000 of salaries expense for the year. Paid a $3,000 dividend to the stockholders. Recorded the accrued interest on December 31,...

The following transactions apply to Hooper Co. for Year 1, its first year of operations: Issued...

The following transactions apply to Hooper Co. for Year 1, its first year of operations: Issued $130,000 of common stock for cash. Provided $104,000 of services on account. Collected $90,000 cash from accounts receivable. Loaned $13,000 to Mosby Co. on November 30, Year 1. The note had a one-year term to maturity and a 8 percent interest rate. Paid $46,000 of salaries expense for the year. Paid a $3,500 dividend to the stockholders. Recorded the accrued interest on December 31,...

Vulcan Service Co. experienced the following transactions for Year 1, its first year of operations: Provided...

Vulcan Service Co. experienced the following transactions for Year 1, its first year of operations: Provided $84,000 of services on account. Collected $50,400 cash from accounts receivable. Paid $30,000 of salaries expense for the year. Adjusted the accounts using the following information from an accounts receivable aging schedule: Number of Days Past Due Amount Percent Likely to Be Uncollectible Allowance Balance Current $ 24,864 .01 0-30 1,680 .05 31-60 2,352 .10 61-90 2,016 .30 Over 90 days 2,688 .50 Required...

Vulcan Service Co. experienced the following transactions for Year 1, its first year of operations: Provided...

Vulcan Service Co. experienced the following transactions for Year 1, its first year of operations: Provided $76,000 of services on account. Collected $45,600 cash from accounts receivable. Paid $26,000 of salaries expense for the year. Adjusted the accounts using the following information from an accounts receivable aging schedule: Number of Days Past Due Amount Percent Likely to Be Uncollectible Allowance Balance Current $ 22,496 .01 0-30 1,520 .05 31-60 2,128 .10 61-90 1,824 .30 Over 90 days 2,432 .50 Required...

Mark’s Consulting experienced the following transactions for 2018, its first year of operations, and 2019. Assume...

Mark’s Consulting experienced the following transactions for 2018, its first year of operations, and 2019. Assume that all transactions involve the receipt or payment of cash. Transactions for 2018 Acquired $75,000 by issuing common stock. Received $110,000 cash for providing services to customers. Borrowed $18,000 cash from creditors. Paid expenses amounting to $55,000. Purchased land for $35,000 cash. Transactions for 2019 Beginning account balances for 2019 are: Cash $ 113,000 Land 35,000 Notes payable 18,000 Common stock 75,000 Retained earnings...

The Shirt Shop had the following transactions for T-shirts for 2018, its first year of operations:

The Shirt Shop had the following transactions for T-shirts for 2018, its first year of operations: Jan. 20 Purchased 400 units 8$3,200 Apr. 21 Purchased 200 units @ $10= 2,000 July 25Purchased 280 units e 13 3,640 Sept. 19 Purchased 90 units 151,350 During the year, The Shirt Shop sold 810 T-shirts for $20 each. Required a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow assumptions: (1) FIFO,...

The Shirt Shop had the following transactions for T-shirts for 2018, its first year of operations:...

The Shirt Shop had the following transactions for T-shirts for 2018, its first year of operations: Jan. 20 Purchased 400 units @ $ 4 = $ 1,600 Apr. 21 Purchased 90 units @ $ 5 = 450 July 25 Purchased 250 units @ $ 7 = 1,750 Sept. 19 Purchased 60 units @ $ 9 = 540 During the year, The Shirt Shop sold 650 T-shirts for $14 each. Required a. Compute the amount of ending inventory The Shirt Shop...

Mark’s Consulting experienced the following transactions for 2018, its first year of operations, and 2019. Assume...

Mark’s Consulting experienced the following transactions for 2018, its first year of operations, and 2019. Assume that all transactions involve the receipt or payment of cash. Transactions for 2018 Acquired $75,000 by issuing common stock. Received $125,000 cash for providing services to customers. Borrowed $20,000 cash from creditors. Paid expenses amounting to $55,000. Purchased land for $30,000 cash. Transactions for 2019 Beginning account balances for 2019 are: Cash $ 135,000 Land 30,000 Notes payable 20,000 Common stock 75,000 Retained earnings...

Subjects