Thornrose Company Started Its Business on January 1, 2013 by Issuing

question 86

Short Answer

Thornrose Company started its business on January 1, 2013 by issuing $5,000 of common stock. On January 1, the company purchased a computer for $3,500. The computer is estimated to have a 3-year useful life and a $500 salvage value. On March 1, Thornrose issued a $9,000, 6% 5-year note to Community Bank. Customers paid Thornrose $18,000 for service performed in 2013. The company paid $11,000 for operating expenses, and paid a $300 dividend to the stockholders. At year-end, Thornrose recognized interest expense on the note and depreciation expense on the computer. Required:
A) What is the amount of interest expense Thornrose will recognize in 2013?
B) What is the book value of the computer at the end of 2013?
C) What is the net income for 2013?
D) Prepare a balance sheet for 2013.

• A) What is the amount of interest expense Thornrose will recognize in 2013?
• B) What is the book value of the computer at the end of 2013?
• C) What is the net income for 2013?
• D) Prepare a balance sheet for 2013.

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