Hoen Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, all transactions are cash transactions. Explain how these events would effect the balance sheet, income statement, and statement of cash flows by recording them in a horizontal financial statements model, in the cash flow column indicate whether the amounts represent financing activities (FA), investing activities (IA), or operating activities (OA).
1. Aquired 50,000 cash by issuing common stock.
2. Paid 8,000 for the materials used to make products, all of which were started and completed during the year.
3. Paid salaries of 4,000 to selling and administrative employees.
4. Paid wages of 7,000
5. Paid 9,600 for furniture used in selling and admin offices. The furn was aquired on Jan 1. It had a 1,600 estimated salvage value and a four year useful life.
6. Paid 13,000 for manuf. equip. The equip was aquired Jan 1. It had an estimated salvage value of 1,000 and a three year useful life.
7. Sold inventory to customers for 25,000 that cost 14,000 to make.