Vernon Company began operations on January 1, year 1, by issuing common stock for $39,000 cash. During year 1, Vernon received $56,200 cash from revenue and incurred costs that required $37,200 of cash payments. Prepare a GAAP-based income statement and balance sheet for Vernon Company for year 1 under the following scenario: b. Vernon is in the car rental business. The $37,200 was paid to purchase automobiles. The automobiles were purchased on January 1, year 1, and have three-year useful lives, with no expected salvage value. Vernon uses straight-line depreciation. The revenue was generated by leasing the automobiles.
Vernon Company began operations on January 1, year 1, by issuing common stock for $39,000 cash. During year 1, Vernon received $56,200 cash from revenue and incurred costs that required $37,200 of cash payments. Prepare a GAAP-based income statement and balance sheet for Vernon Company for year 1 under the following scenario: b. Vernon is in the car rental business. The $37,200 was paid to purchase automobiles. The automobiles were purchased on January 1, year 1, and have three-year useful lives, with no expected salvage value. Vernon uses straight-line depreciation. The revenue was generated by leasing the automobiles.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Vernon Company began operations on January 1, year 1, by issuing common stock for $39,000 cash. During year 1, Vernon
received $56,200 cash from revenue and incurred costs that required $37,200 of cash payments.
Prepare a GAAP-based income statement and balance sheet for Vernon Company for year 1 under the following scenario:
b. Vernon is in the car rental business. The $37,200 was paid to purchase automobiles. The automobiles were purchased on January 1,
year 1, and have three-year useful lives, with no expected salvage value. Vernon uses straight-line depreciation. The revenue was
generated by leasing the automobiles.
Complete this question by entering your answer in the tabs below.
Income
Statement
Balance Sheet
Prepare an Income Statement.
VERNON COMPANY
Income Statement for Year 1
$
Sales revenue
Depreciation expenses
$
56,200
56,200](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F58bd1525-75ec-46a5-be25-53d8789ee850%2Fd9fb3d4b-9b70-4348-b34d-0a64e1b3f614%2F736prk7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
Vernon Company began operations on January 1, year 1, by issuing common stock for $39,000 cash. During year 1, Vernon
received $56,200 cash from revenue and incurred costs that required $37,200 of cash payments.
Prepare a GAAP-based income statement and balance sheet for Vernon Company for year 1 under the following scenario:
b. Vernon is in the car rental business. The $37,200 was paid to purchase automobiles. The automobiles were purchased on January 1,
year 1, and have three-year useful lives, with no expected salvage value. Vernon uses straight-line depreciation. The revenue was
generated by leasing the automobiles.
Complete this question by entering your answer in the tabs below.
Income
Statement
Balance Sheet
Prepare an Income Statement.
VERNON COMPANY
Income Statement for Year 1
$
Sales revenue
Depreciation expenses
$
56,200
56,200
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