Franklin Company began operations on January $1,$ year $1,$ by issuing common stock for $$34,000$ cash. During year $1,$ Franklin received $$66,200$ cash from revenue and incurred costs that required $$49,200$ of cash payments.

Prepare a GAAP$-$based income statement and balance sheet for Franklin Company for year $1$ under the following scenario:

Franklin is in the car rental business. The $$49,200$ was paid to purchase automobiles. The automobiles were purchased on January $1,$ year $1,$ and have four$-$year useful lives, with no expected salvage value. Franklin uses straight$-$line depreciation. The revenue was generated by leasing the automobiles.Required information

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Franklin Company began operations on January $1,$ year $1,$ by issuing common stock for $$34,000$ cash. During year $1,$

Franklin received $$66,200$ cash from revenue and incurred costs that required $$49,200$ of cash payments.

Prepare a GAAP$-$based income statement and balance sheet for Franklin Company for year $1$ under the following scenario:

b$.$ Franklin is in the car rental business. The $$49,200$ was paid to purchase automobiles. The automobiles were purchased on January

$1,$ year $1,$ and have four$-$year useful lives, with no expected salvage value. Franklin uses straight$-$line depreciation. The revenue was

generated by leasing the automobiles.

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Income

Statement

Balance Sheet

Prepare an Income Statement.

FRANKLIN COMPANY

Income Statement for Year $1$