Accounting for depreciation over multiple accounting cycles: straight-line depreciation
KC Company began operations when it acquired $30,000 cash from the issue of common stock on January 1, 2011. The cash acquired was immediately used to purchase equipment for $30,000 that had a $5,000 salvage value and an expected useful life of four years. The equipment was used to produce the following revenue stream (assume all revenue transactions are for cash). At the beginning of the fifth year, the equipment was sold for $4,500 cash. KC uses straight-line depreciation.
Required
Prepare income statements, statements of changes in stockholders’ equity, balance sheets, and statements of cash flows for each of the five years.
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