Essay Questions
121. Horizon Corporation began business operations and experienced the following transactions during 2011:
1) Issued common stock for $10,000 cash.
2) Provided services to customers for $25,000 on account.
3) Purchased $500 of supplies on account.
4) Paid $6,000 cash to rent office space for a month period beginning June 1.
5) Collected $23,000 cash from customers.
6) Paid cash for $18,000 of operating expenses.
7) Adjusted the accounting records to reflect that there was $150 of supplies remaining on hand at year-end.
8) Recorded an end-of-year adjustment to recognize rent expense.
Required:
a) Record the above transactions on a horizontal statements model, reflecting their effect on the different financial statements.
b) Prepare Horizon Corporation's income statement, balance sheet and statement of cash flows for the year ended December 31, 2011.