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Calculate the amount of depreciation for xyz company

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Reference no: EM132867188

XYZ Company, which is in merchandising business, has been operating its business for years. The following were the transactions in 2019:

Jan 1 - Shareholder Mr. X invested in the company. The company issued capital stock to Mr. X in exchange for $80,000 cash.

Jan 1 - Purchased an equipment for $25,000 and paid cash. The useful life of the equipment is 5 years with residual value $5,000. Straight line depreciation will be adopted for this equipment.

July 5 - Provided services to a client with revenue $40,000. The client paid $20,000 cash and the residual amount will be settled in 2019.

Dec 31 - Paid utilities expense $25,000 in cash.

Problem a) Prepare journal entries for the year 2019

Problem b) Calculate the amount of depreciation

Problem c) Prepare the Income Statement for 2019

Reference no: EM132867188

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