Golden Manufacturing Company started operations by acquiring $150,000 cash from the issue of common stock. On January 1, Year 1, the company purchased equipment that cost $120,000 cash, had an expected useful life of six years, and had an estimated salvage value of $4,000. Golden Manufacturing earned $72,000 and $83,000 of cash revenue during Year 1 and Year 2, respectively. Golden Manufacturing uses double-declining-balance depreciation. Requireda. Record the purchase in a horizontal statements model.b-1. Prepare income statements for Year 1 and Year 2.b-2. Prepare balance sheets for Year 1 and Year 2.b-3. Prepare statements of cash flows for Year 1 and Year 2.

Question

Golden Manufacturing Company started operations by acquiring $150,000 cash from the issue of common stock. On January 1, Year 1, the company purchased equipment that cost $120,000 cash, had an expected useful life of six years, and had an estimated salvage value of $4,000. Golden Manufacturing earned $72,000 and $83,000 of cash revenue during Year 1 and Year 2, respectively. Golden Manufacturing uses double-declining-balance depreciation.
 
Required
a. Record the purchase in a horizontal statements model.
b-1. Prepare income statements for Year 1 and Year 2.
b-2. Prepare balance sheets for Year 1 and Year 2.
b-3. Prepare statements of cash flows for Year 1 and Year 2.

Expert Answer

Want to see the step-by-step answer?

See Answer

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Answer
*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: Problem 11-2A (Part Level Submission) The stockholders’ equity accounts of Cheyenne Corp. on Januar...

A: Calculating the value of dividends paid to common stockholder. We have,The value of dividend paid to...

Q: Brief Exercise 21A-6 Metlock Company leased equipment from Costner Company, beginning on December 31...

A: Prepare jounal entry to record lease liability: 

Q: Blossom Company estimates that 2020 sales will be $40000 in quarter 1, $48000 in quarter 2, and $580...

A: A merchandise purchases budget is a budgetary arrangement that reports the absolute appraisals expen...

Q: What is the major reason for a forward stock split?

A: Stock Split: Stock Split is a scheme in which a company’s total number of shares outstanding will ei...

Q: On May 1, 2020, Judice Company issued 400 $1,000 bonds at 104. Each bond was issued with two detacha...

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lend...

Q: HH purchased new shelving for its store on April 1, 2018. The shelving is expected to have a 20-year...

A: Since, we only answer upto 3 sub-parts, we'll answer the first 3.Please resubmit the question and sp...

Q: Hello, (Continued from an earlier email). Silverstone's production budget for July called for making...

A: Fixed overhead volume variance: The difference between the actual fixed overhead applied to the prod...

Q: Platt Company produces one product, a putter called PAR –putter. Platt uses a standard cost system a...

A: Compute the predetermined variable overhead rate: 

Q: Flounder Windows manufactures and sells custom storm windows for three-season porches. Flounder also...

A: Revenue Recognition: As per the revenue recognition concept of accounting, the revenue of the busine...