Frey Company Was Founded January 1,2012

question 123

Essay

Frey Company was founded January 1,2012.During 2012,the company experienced the following events:
1.earned cash revenue of $50,000.
2.paid cash expenses of $41,000.
3.issued common stock for $30,000 cash.
4.paid cash dividend of $2,000 to owners.
Required:
a)Write an accounting equation and record effects of each accounting event under appropriate general ledger account headings,showing dollar amounts of increases and decreases and totals at the end of the year.
b)Prepare the 2012 income statement and balance sheet for Frey Company.

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Definitions:

Continental Collision

A tectonic process whereby two continental plates collide, leading to the formation of mountains and mountain ranges.

Ocean-Continent Convergent Zone

A boundary between tectonic plates where an oceanic plate is subducting beneath a continental plate, often generating volcanic and seismic activity.

Accretionary Prism

A wedge-shaped accumulation of sediment and rock scraped off the top of a descending tectonic plate at a convergent plate boundary.

Volcanic Mountain Belt

A geographical area consisting of numerous volcanoes which are formed along plate boundaries or over hotspots in Earth's crust.