Bensen Company began operations when it acquired $26,700 cash from the issue of common stock on...

Bensen Company began operations when it acquired $26,700 cash from the issue of common stock on January 1, 2018. The cash acquired was immediately used to purchase equipment for $26,700 that had a $3,500 salvage value and an expected useful life of four years. The equipment was used to produce the following revenue stream (assume all revenue transactions are for cash). At the beginning of the fifth year, the equipment was sold for $2,300 cash. Bensen uses straight-line depreciation.

	2018	2019	2020	2021	2022
Revenue	$7,880	$8,380	$8,580	$7,380	$0

Required

Prepare income statements, statements of changes in stockholders’ equity, balance sheets, and statements of cash flows for each of the five years. Present the statements in the form of a vertical statements model. (Statement of Cash Flows and Balance Sheet only: Items to be deducted must be indicated with a minus sign.)

BENSEN COMPANY
For the Year Ended December 31
Income Statement
	2018	2019	2020	2021	2022



Gain/(Loss)
Net income/(loss)

Satement of Changes in Stockholders' Equity




Net income/(loss)

Total stockholder's equity

Balance Sheet
Assets



Total assets
Stockholder's Equity


Total stockholder's equity

Statement of Cash Flows
Operating activities:


Net cash flow from operating activities
Investing activities:



Net cash investing activities
Financing activities:


Net cash flow from financing activities
Net change in cash

Ending cash balance

Expert Solution

Bensen Company
For the year ended December 31
Income statement
	2018	2019	2020	2021	2022
Revenue from operations	7880	8380	8580	7389	0

Less:
Depreciation ((26700-3500)/4)	5800	5800	5800	5800	0
Loss on sale of Asset (3500-2300)	0	0	0	0	1200

Gain/ (Loss)	2080	2580	2780	1589	-1200
Net Income / (Loss)	2080	2580	2780	1589	-1200

Statement of change in Stockholders equity
	2018	2019	2020	2021	2022
Common Stock:
Start of the year	0	26700	26700	26700	26700
Issue of additional stock	26700	0	0	0	0
End Balance	26700	26700	26700	26700	26700

Retained Earnings:
Start of the year	0	2080	4660	7440	9029
Net Income/ (Loss) for the year	2080	2580	2780	1589	-1200
End Balance	2080	4660	7440	9029	7829

Total Stockholders equity	28780	31360	34140	35729	34529

Balance Sheet
	2018	2019	2020	2021	2022
Assets
Cash	7880	16260	24840	32229	34529

Equipment Opening Balance	26700	20900	15100	9300	3500
Less: Depreciation on Equipment	5800	5800	5800	5800	0
Less: Sale of Equipment	0	0	0	0	3500
Net Equipment	20900	15100	9300	3500	0

Total Assets	28780	31360	34140	35729	34529

Stockholers Equity
Common Stock	26700	26700	26700	26700	26700
Retained Earnings	2080	4660	7440	9029	7829

Total Stockholers Equity	28780	31360	34140	35729	34529

Statement of Cash Flow
Operating Activities
Net Income/ (loss)	2080	2580	2780	1589	-1200
Add: Depreciation	5800	5800	5800	5800	0
Add: Loss on sale of equipment	0	0	0	0	1200
Net Cash flow from operating activities	7880	8380	8580	7389	0

Investing activities
Purchase of Equipment	-26700	0	0	0	0
Sale of Equipment	0	0	0	0	2300
Net Cash Investing activities	-26700	0	0	0	2300

Financing activities
Stock Issued	26700	0	0	0	0
Net Cash flow from Financing activities	26700	0	0	0	0

Net change in Cash	7880	8380	8580	7389	2300
Add: Opening Cash balance	0	7880	16260	24840	32229
Ending Cash Balance	7880	16260	24840	32229	34529

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