Turner Company Started Its Business by Issuing $10,000 of Common

question 112

Essay

Turner Company started its business by issuing $10,000 of common stock on January 1, Year 1. The company performed $38,000 of service for customers on account in Year 1. It collected $32,500 of this amount in Year 1, recorded expenses on account of $29,500, paid $21,000 of the payables owed, and paid a $500 dividend to the stockholders.Required:What is the amount of total assets at the end of Year 1?What is the amount of cash on hand at the end of Year 1?What is the net income for Year 1?Prepare a balance sheet for Year 1.

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Definitions:

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.

Interest Rate

The percentage of a loan charged to the borrower as interest, usually presented as an annual rate of the remaining loan balance.

Present Value

The calculated present value of a prospective sum of money or cash flow stream, utilizing a given rate of return.

Land

In economics, land refers to all natural resources used to produce goods and services, including not just real estate but also agricultural land, forests, and mineral resources.