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Zachary Company began operations on January 1, 2018, by issuing common stock for $37,000 cash. During...

Zachary Company began operations on January 1, 2018, by issuing common stock for $37,000 cash. During 2018, Zachary received $56,200 cash from revenue and incurred costs that required $37,200 of cash payments.

Prepare a GAAP-based income statement and balance sheet for Zachary Company for 2018, under each of the following independent scenarios:

Zachary is in the car rental business. The $37,200 was paid to purchase automobiles. The automobiles were purchased on January 1, 2018, and have three-year useful lives, with no expected salvage value. Zachary uses straight-line depreciation. The revenue was generated by leasing the automobiles.

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