Scott Company began operations when it acquired $40,000 cash from the issue of common stock on January 1, 2016. The cash acquired was immediately used to purchase equipment for $40,000 that had a $4,000 salvage value and an expected useful life of four years. The equipment was used to produce the following revenue stream. At the beginning of the fifth year, the equipment was sold for $4,500 cash. Scott uses straight-line depreciation.
Prepare income statements, statements of changes in stockholders’ equity, balance sheets, and statements of cash flows for each of the five years.