Hernandez Company Began Business Operations and Experienced the Following Transactions

Question 109

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.