The Garza Company Was Started on January 1, 2012 as a Sole

question 93

Essay

The Garza Company was started on January 1, 2012 as a sole proprietorship. The initial investment from J. Garza, the owner, was $40,000. During 2012, the business earned $30,000 in cash revenue and paid $20,000 in cash expenses. Ms. Garza withdrew from the business $2,000 for her personal use. Using the above information, prepare an income statement, a capital statement, and a balance sheet for the Garza Company.

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Definitions:

Friction Surfaces

Areas where two materials come into contact and movement between them is resisted by friction, important in braking systems and clutches.

Governor

A device used to regulate the speed of machinery by automatically adjusting the supply of fuel, steam, or other power source.

Brake Chambers

Components in air brake systems, primarily in heavy vehicles, where pressurized air is converted into mechanical force to apply the brakes.