Hernandez Company began business operations and experienced the following transactions during 2016:
1)Issued common stock for $50,000 cash.
2)Provided services to customers for $125,000 on account.
3)Purchased $2,500 of supplies on account.
4)Paid $30,000 cash to rent office space for a 12-month period beginning July 1.
5)Collected $115,000 cash from customers.
6)Paid cash for $90,000 of operating expenses.
7)Adjusted the accounting records to reflect that there was $750 of supplies remaining on hand at year-end.
8)Recorded an end-of-year adjustment to recognize rent expense.
Required:
a)Record the above transactions on a horizontal statements model,reflecting their effect on the different financial statements.Precede the amount with a minus sign if the transaction reduces that section of the equation.Precede a cash outflow amount with a minus sign.Enter 0 for items not affected.
b)Prepare Hernandez Company's income statement,balance sheet and statement of cash flows for the year ended December 31,2016.

Question

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The Answer of Hernandez Company began business operations and experienced the following transactions during 2016:
1)Issued common stock for $50,000 cash.
2)Provided services to customers for $125,000 on account.
3)Purchased $2,500 of supplies on account.
4)Paid $30,000 cash to rent office space for a 12-month period beginning July 1.
5)Collected $115,000 cash from customers.
6)Paid cash for $90,000 of operating expenses.
7)Adjusted the accounting records to reflect that there was $750 of supplies remaining on hand at year-end.
8)Recorded an end-of-year adjustment to recognize rent expense.
Required:
a)Record the above transactions on a horizontal statements model,reflecting their effect on the different financial statements.Precede the amount with a minus sign if the transaction reduces that section of the equation.Precede a cash outflow amount with a minus sign.Enter 0 for items not affected.
b)Prepare Hernandez Company's income statement,balance sheet and statement of cash flows for the year ended December 31,2016.

Hernandez Company Began Business Operations and Experienced the Following Transactions