The following transactions pertain to Engineering Solutions Inc. Assume the transactions for the purchase of the computer and any capital improvements occur on January 1 each year. 2013 1. Acquired $80,000 cash from the issue of common stock. 2. Purchased a computer system for $35,000. It has an estimated useful life of five years and a $5,000 salvage value. 3. Paid $2,450 sales tax on the computer system. 4. Collected $65,000 in fees from clients. 5. Paid $1,500 in fees to service the computers. 6. Recorded double-declining-balance depreciation on the computer system for 2013. 7. Closed the revenue and expense accounts to Retained Earnings at the end of 2013. 2014 1. Paid $1,000 for repairs to the computer system. 2. Bought off-site backup services to maintain the computer system, $1,500. 3. Collected $68,000 in fees from clients. 4. Paid $1,500 in fees to service the computers. 5. Recorded double-declining-balance depreciation for 2014. 6. Closed the revenue and expense accounts to Retained Earnings at the end of 2014.2015 1. Paid $6,000 to upgrade the computer system, which extended the total life of the system to six years. The salvage value did not change. 2. Paid $1,200 in fees to service the computers. 3. Collected $70,000 in fees from clients. 4. Recorded double-declining-balance depreciation for 2015. 5. Closed the revenue and expense accounts at the end of 2015. Required a. Use a horizontal statements model like the following one to show the effect of these transactions on the elements of financial statements. Use + for increase, – for decrease, and NA for not affected. The first event is recorded as an example.b. For each year, record the transactions in general journal form and post them to T-accounts. c. Use a vertical model to present financial statements for 2013, 2014, and2015.
The following transactions pertain to Engineering Solutions Inc Assume the