The following transactions apply to Hooper Co. for 2018, its first year of opera

Q: The following transactions apply to Hooper Co. for 2018, its first year of opera

Income statement as below: Cash flow statement: Balance sheet: Particulars Amount Service revenue 100000 Operating expenses: Salaries 36000 Allowance for uncollectible 1000 Total operating expenses 37000 Income from operations 63000 Non Operating items Interest income 60 Income from non operating items 60 Net income 63060 Minus: Dividends paid 2500 Net income transferred to retained earnings 60560

ID: 2583638 • Letter: T

Question

The following transactions apply to Hooper Co. for 2018, its first year of operations: 1. Issued $200,000 of common stock for cash. 2. Provided $100,000 of services on account. 3. Collected $90,000 cash from accounts receivable. 4. Loaned $9,000 to Mosby Co. on November 30, 2018. The note had a one-year term to maturity and a 8 percent interest rate. 5. Paid $36,000 of salaries expense for the year 6. Paid a $2,500 dividend to the stockholders 7. Recorded the accrued interest on December 31, 2018 (see item 4) 8. Estimated that 1 percent of service revenue will be uncollectible.

Explanation / Answer

Income statement as below:

Cash flow statement:

Balance sheet:

Particulars Amount Service revenue 100000 Operating expenses: Salaries 36000 Allowance for uncollectible 1000 Total operating expenses 37000 Income from operations 63000 Non Operating items Interest income 60 Income from non operating items 60 Net income 63060 Minus: Dividends paid 2500 Net income transferred to retained earnings 60560

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The following transactions apply to Hooper Co. for 2018, its first year of opera

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