Question

In: Accounting

Typewritten answers only, please. No handwritten answers. Thank you. Golden Manufacturing Company started operations by acquiring...

Typewritten answers only, please. No handwritten answers.

Thank you.

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.

Prepare an income statements for 2018 and 2019. Use a vertical statements format. (Do not round intermediate calculations. Round the final answers to nearest dollar amount.)

GOLDEN MANUFACTURING COMPANY
Income Statements
For the Year Ended December 31
2018 2019
        

b-2. Prepare a balance sheets for 2018 and 2019. Use a vertical statements format. (Do not round intermediate calculations. Round the final answers to nearest dollar amount.)

GOLDEN MANUFACTURING COMPANY
Balance Sheets
As of December 31
2018 2019
Assets
Total Assets $0 $0
Stockholders’ equity
Total stockholders’ equity $0 $0

b-3. Prepare a statements of cash flows for 2018 and 2019. Use a vertical statements format. (Amounts to be deducted should be indicated with minus sign. Do not round intermediate calculations. Round the final answers to nearest dollar amount.)

GOLDEN MANUFACTURING COMPANY
Statements of Cash Flows
For the Year Ended December 31
2018 2019
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net change in cash
Ending cash balance $0 $0

Typewritten answers only, please. No handwritten answers.

Thank you.

Solutions

Expert Solution

Year Book value of the asset at the start of the year Rate of declining Blance Depreciation expense Accumuluted depreciation Book Value of asset at the end of the year
2018 101000 40% 40400 40400 60600
2019 60600 40% 24240 64640 36360
2020 36360 40% 14544 79184 21816
2021 21816 40% 8726.4 87910.4 13089.6
2022 13089.6 40% 2989.6 90900 10100
Golden manufacturing company
Income Statement
For the year ended 31
2018 2019
Sales Revenue 99310 69480
Less : Expenses
Deprciation 40400 24240
Net Income 58910 45240
Golden manufacturing company
Balance sheet
As of December 31
2018 2019
Asset
Current Asset
Cash 109310 178790
Equipment 101000 101000
Less : Accumulated Depreciation 40400 64640
Equipement Net 60600 36360
Total Assets 169910 215150
Liabilities & Shareholder's Equity
Common Stock 111000 111000
Retained Earnings 58910 104150
Total Liabilities & Shareholder's Equity 169910 215150
Golden manufacturing company
Statement of Cash flows
For the year ended 31
2018 2019
Cash flows from operating activities
Net Income 58910 45240
Add : Depreciation 40400 24240
Cash flows from operating activities 99310 69480
Cash flows from Investing activites
Purchase of equipment -101000 0
Cash flows from financing activities
Issuance of common stock 111000 0
Net Change in cash 109310 69480
Add: Beginning balance 0 109310
Ending balance 109310 178790



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