In the first month of operations (April Year 1) of the QuickClean Company, a service business, the following events occurred.
events occurred.

a. Issued stock for $100,000; 20,000 shares with a $1 par value.
b. Purchased equipment with a useful life of ten years for $12,000.
c. Purchased a building with a useful life of 20 years for $24,000.
d. Bought office supplies for $2,400. Supplies are expected to last one year.
e. Paid salaries of $10,000.
f. Borrowed $15,000 from bank on last day of the month. 12% interest rate payable in 90 days.
g. Sold services for $20,000 on account.
h. Collected $15,000 of receivables.
i. Recorded expense accruals of $4,000 at end of month.

Required:
Prepare a balance sheet and statement of cash flow using the indirect method for the first month of operations.

Question

In the first month of operations (April Year 1) of the QuickClean Company, a service business, the following events occurred.
 events occurred.

a.	Issued stock for $100,000; 20,000 shares with a $1 par value.
b.	Purchased equipment with a useful life of ten years for $12,000.
c.	Purchased a building with a useful life of 20 years for $24,000.
d.	Bought office supplies for $2,400. Supplies are expected to last one year.
e.	Paid salaries of $10,000.
f.	Borrowed $15,000 from bank on last day of the month. 12% interest rate payable in 90 days.
g.	Sold services for $20,000 on account.
h.	Collected $15,000 of receivables.
i.	Recorded expense accruals of $4,000 at end of month.

Required:
Prepare a balance sheet and statement of cash flow using the indirect method for the first month of operations.

Quizplus · Accepted Answer

The Answer of In the first month of operations (April Year 1) of the QuickClean Company, a service business, the following events occurred.
 events occurred.

a.	Issued stock for $100,000; 20,000 shares with a $1 par value.
b.	Purchased equipment with a useful life of ten years for $12,000.
c.	Purchased a building with a useful life of 20 years for $24,000.
d.	Bought office supplies for $2,400. Supplies are expected to last one year.
e.	Paid salaries of $10,000.
f.	Borrowed $15,000 from bank on last day of the month. 12% interest rate payable in 90 days.
g.	Sold services for $20,000 on account.
h.	Collected $15,000 of receivables.
i.	Recorded expense accruals of $4,000 at end of month.

Required:
Prepare a balance sheet and statement of cash flow using the indirect method for the first month of operations.

In the First Month of Operations (April Year 1) of the QuickClean