Daenerys Co. began operations on Jan. 1, 2019. Daenerys starts her business by investing $20,000...
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Daenerys Co. began operations on Jan. 1, 2019. Daenerys starts her business by investing $20,000 of her own money by purchasing 2,000 shares of $1 par value stock, and borrowing $50,000 from the bank. The loan has an interest rate of 6-percent, and she will have to make quarterly payments of $5,000 plus accumulated interest, on the first of each April, July, October, and January, until the entire principle is repaid. On April 1, Daenerys purchased equipment for $15,000 cash. She will depreciate the new equipment over five years using straight line depreciation, and expects a salvage value of $2,000. She also purchased for cash for $4,000 in supplies during the year, with only $250 of supplies remaining at year end. Daenerys does not offer credit to her customers. For the first year of operations, she had cash revenues of $80,000. Daenerys also incurred $26,500 for other operating expenses, for which she still owes $3,250.
Required: Ignoring taxes, provide an (a) Income Statement and (b) Balance Sheet for Daenerys Co.first year of business ending 12/31/2019. Also, determine (i) Cash from Operations, (ii) Cash from Investing, and (iii) Cash from Financing for the year. Be sure to show your work.
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