Posey Company started operations by acquiring $89,000 cash from the issue of common stock. On January 1, 2014, the company purchased equipment that cost $79,000 cash. The equipment had an expected useful life of five years and an estimated salvage value of $7,900. Posey Company earned $89,110 and $62,040 of cash revenue during 2014 and 2015, respectively. Posey Company uses double-declining-balance depreciation.
Record the above transactions in a horizontal statements model like the following one. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), a financing activity (FA) and net change in cash (NC). The letters NA indicate that an element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.)
Prepare an income statements for 2014 and 2015. Use a vertical statements format
Prepare a balance sheets for 2014 and 2015. Use a vertical statements format.
b3 -Prepare a statements of cash flows for 2014 and 2015. Use a vertical statements format. (Amounts to be deducted should be indicated with minus sign.)