Hernandez Company Began Business Operations and Experienced the Following Transactions

question 93

Essay

Hernandez Company began business operations and experienced the following transactions during the year beginning January 1, Year 1:Issued common stock for $50,000 cash.Provided services to customers for $125,000 on account.Purchased $2,500 of supplies on account.Paid $30,000 cash to rent office space for a 12-month period beginning July 1, Year 1.Collected $115,000 cash from customers.Paid cash for $90,000 of operating expenses.Adjusted the accounting records to reflect that there was $750 of supplies remaining on hand at year-end.Recorded an end-of-year adjustment to recognize rent expense.Required:Record the above transactions on a horizontal statements model, reflecting their effect on the different financial statements.Prepare Hernandez Company's income statement, balance sheet and statement of cash flows for the year ended December 31, Year 1.

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Definitions:

Seafarers

Individuals who work or travel by sea, often referring to sailors, fishermen, or cultures with strong maritime traditions.

Agriculturalists

Individuals or groups who engage in agriculture, the science, art, and business of cultivating soil, producing crops, and raising livestock.

Hunters

Individuals or groups that pursue and kill wild animals for food, sport, or traditional cultural practices.

Kinship

Social bonds and relationships derived from genetics, marriage, or adoption, influencing social interactions and structures in societies.