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Posey Company started operations by acquiring $120,000 cash from the issue of common stock. On January 1, 2013, the company purchased equipment that cost $110,000 cash. The equipment had an expected useful life of five years and an estimated salvage value of $10,000. Posey Company earned $85,000 and $72,000 of cash revenue during 2013 and 2014, respectively. Posey Company uses double-declining-balance depreciation.
Required:
Prepare income statements, balance sheets, and statements of cash flows for 2013 and 2014. Use a vertical statements format.
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