Bensen Company started business by acquiring $27,200 cash from the issue of common stock on January 1, Year 1. The cash acquired was immediately used to purchase equipment for $27,200 that had a $3,200 salvage value and an expected useful life of four years. The equipment was used to produce the following revenue stream (assume that all revenue transactions are for cash). At the beginning of the fifth year, the equipment was sold for $3,790 cash. Bensen uses straight-line depreciation. Year 1 Revenue $ 7,870 Year 2 $ 8,370 Year 3 $ 8,570 Year 4 $ 7,370 Year 5 $ 0 Required Prepare income statements, statements of changes in stockholders' equity, balance sheets, and statements of cash flows for each of the five years.

Bensen Company started business by acquiring $27,200 cash from the issue of common stock on January 1, Year 1. The cash acquired was immediately used to purchase equipment for $27,200 that had a $3,200 salvage value and an expected useful life of four years. The equipment was used to produce the following revenue stream (assume that all revenue transactions are for cash). At the beginning of the fifth year, the equipment was sold for $3,790 cash. Bensen uses straight-line depreciation. Year 1 Revenue $ 7,870 Year 2 $ 8,370 Year 3 $ 8,570 Year 4 $ 7,370 Year 5 $ 0 Required Prepare income statements, statements of changes in stockholders' equity, balance sheets, and statements of cash flows for each of the five years.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Bensen Company started business by acquiring $27,200 cash from the issue of common stock on January 1, Year 1. The cash acquired
was immediately used to purchase equipment for $27,200 that had a $3,200 salvage value and an expected useful life of four years.
The equipment was used to produce the following revenue stream (assume that all revenue transactions are for cash). At the
beginning of the fifth year, the equipment was sold for $3,790 cash. Bensen uses straight-line depreciation.
Year 1
Revenue
$ 7,870
Year 2
$ 8,370
Year 3
$ 8,570
Year 4
$ 7,370
Year 5
$ 0
Required
Prepare income statements, statements of changes in stockholders' equity, balance sheets, and statements of cash flows for each of
the five years.
Complete this question by entering your answers in the tabs below.
Income
Statement
Statement of
Changes in
Balance Sheet
Statement of
Cash Flows
Stockholders
Prepare income statements for each of the five years.
Revenue
Depreciation expense
Operating income
Gain/(Loss) on sale of asset
Net income/(loss)
BENSEN COMPANY
Income Statement
For the Year Ended December 31
Year 1
Year 2
Year 3
Year 4
Year 5
0
0
0
0
0
$
0
$
0
$
0
$
0
$
0
< Income Statement
Statement of Changes in Stockholders Equity >

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