Reference no: EM132532429

The following transactions apply to Hooper Co. for Year 1, its first year of operations:

1. Issued $140,000 of common stock for cash.
2. Provided $90,000 of services on account.
3. Collected $78,000 cash from accounts receivable.
4. Loaned $11,000 to Mosby Co. on November 30, Year 1. The note had a one-year term to maturity and a 10 percent interest rate.
5. Paid $40,000 of salaries expense for the year.
6. Paid a $3,500 dividend to the stockholders.
7. Recorded the accrued interest on December 31, Year 1 (see item 4).
8. Determined that $560 of accounts receivable were uncollectible.

Required

Question a. Record the above transactions in general journal form.

Question b. Post the entries to T-accounts.

Question c. Prepare the income statement, balance sheet, and statement of cash flows for Year 1.

Question d. Show the effects of the above transactions in a horizontal statements model like the one shown below: When you record amounts in the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), financing activity (FA), or net change (NC). The letters NA indicate that an element is not affected by the event.