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Problem 6-3 15 points Major Inc. began operations when it acquired ...

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Accounting

Problem 6-3
15 points
Major Inc. began operations when it acquired
$450,000 cash from the issue of common stock
on January 1,2020. The cash acquired was immediately used to purchase equipment for
$450,000
that had a
$90,000
salvage value and an expected useful life of four years. The equipment was
used to produce the following revenue stream (assume all revenue transactions are for cash). At the
beginning of the fifth year, the equipment was sold for
$45,000
cash.
Major Inc. uses straight-line depreciation. Assume depreciation is the only expense to record.
REQUIRED
Prepare income statements, balance sheets, and statements of cash flows for each of the five years.
Students may want to utilize a horizontal model for each year to organize transactions and verify numbers for financial statements
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