Green Acres Lawn Care provided $636,000 of services to customers during Year 1. All customers paid for the services with credit cards. The company submitted the credit card receipts to the credit card company Immediately, and the credit card company paid cash In the amount of face value less a 5 percent service charge. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, Income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, In the Statement of Cash Flows column, classify the cash flows as operating activities (OA), Investing activities (IA), or financing activities (FA). Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank If no Input is needed. Event Credit card sales Collection of the receivables Cash Balance Sheet Assets Accounts Receivable - Credit Card Liabilities Stockholders' Equity Revenue Income Statement Expenses Net Income Statement of Cash Flows

Green Acres Lawn Care provided $636,000 of services to customers during Year 1. All customers paid for the services with credit cards. The company submitted the credit card receipts to the credit card company Immediately, and the credit card company paid cash In the amount of face value less a 5 percent service charge. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, Income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, In the Statement of Cash Flows column, classify the cash flows as operating activities (OA), Investing activities (IA), or financing activities (FA). Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank If no Input is needed. Event Credit card sales Collection of the receivables Cash Balance Sheet Assets Accounts Receivable - Credit Card Liabilities Stockholders' Equity Revenue Income Statement Expenses Net Income Statement of Cash Flows

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 38E: Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on...

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For each of the following activities, identify the effect on each component of the income statement and balance sheet. (Enter ell amounts as positive values. If the effect is both Increase and decrease, enter the amount. Do not enter 0.) 1. $14,000 of services were provided to clients on credit today. 2. $5,000 cash was collected for services performed on credit last month. 3. $25,000 cash was borrowed from the bank. 4. $500 of advertising was done in the local newspaper today on account. 5. $500 was pald regarding the advertising in (4) above. 6. The owner invested an additional $10,000 cash into the business. 7. The owner withdrew $5,000 of cash from the business. 8. The owner took $200 worth of office supples home for personal use. 9. A new computer was purchased for $2,000 cash. 10. A one-year Insurance policy costing $12,000 was purchased today. 11. Purchased $45 of fuel for the van; pald cash. 12. Collected $900 from a client for work performed today. es Income Statement Balance…
New Wave Images is a graphics design firm that prepares its financial statements using acalendar year. Manny Kinn, the company treasurer and vice president of finance, has prepared a classified balance sheet as of December 31. In January, this balance sheet will be submitted along with an application for a loan from First Peoples Community Bank. An excerpt from the balance sheet follows: Cash $ 25,000Accounts receivable 85,000......Total assets $250,000 The accounts receivable balance includes a $56,000 loan to Tom Morrow, the company president. Tom borrowed the money from New Wave 18 months earlier for a down payment on a new home. Tom has orally assured Manny that he will pay off the loan within the next year. Because Tom is the company president, Manny treats the amount due as a trade account receivable. In addition, Manny knows that the bank will consider a large balance in trade accounts receivable more favorably than a large personal loan to a single individual. Manny reported…
Music Flow is a streaming music service specializing in podcasts. Music Flow generates revenue through subscriptions that requires customers to pay using a credit card. Consider the following events for Music Flow in Year 1: Music Flow earned $528,000 of subscription revenue during Year 1. Music Flow submitted the credit card receipts to the credit card company immediately. The credit card company paid Music Flow cash in the amount of face value less a 4 percent service charge. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on transactions that occurred during the year: a. Purchased supplies on credit, $18,600 b. Paid $14,800 cash toward the purchase in Transaction a c. Provided services to customers on credit1 $46,925 d. Collected $39,650 cash from accounts receivable e. Recorded depreciation expense, $8,175 f. Employee salaries accrued, $15,650 g. Paid $15,650 cash to employees for salaries earned h. Accrued interest expense on long-term debt, $1,950 i. Paid a total of $25,000 on long-term debt, which includes $1.950 interest from Transaction h j. Paid $2,220 cash for l years insurance coverage in advance k. Recognized insurance expense, $1,340, that was paid in a previous period l. Sold equipment with a book value of $7,500 for $7,500 cash m. Declared cash dividend, $12,000 n. Paid cash dividend declared in Transaction m o. Purchased new equipment for $28,300 cash. p. Issued common stock for $60,000 cash q. Used $10,700 of supplies to produce revenues Summit Sales uses the indirect method to prepare its statement of cash flows. Required: 1. Construct a table similar to the one shown at the top of the next page. Analyze each transaction and indicate its effect on the fundamental accounting equation. If the transaction increases a financial statement element, write the amount of the increase preceded by a plus sign (+) in the appropriate column. If the transaction decreases a financial statement element, write the amount of the decrease preceded by a minus sign (-) in the appropriate column. 2. Indicate whether each transaction results in a cash inflow or a cash outflow in the Effect on Cash Flows column. If the transaction has no effect on cash flow, then indicate this by placing none in the Effect on Cash Flows column. 3. For each transaction that affected cash flows, indicate whether the cash flow would be classified as a cash flow from operating activities, cash flow from investing activities, or cash flow from financing activities. If there is no effect on cash flows, indicate this as a non-cash activity.
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During its first year of operations, Cooper Company bills credit customers $19,800 for services rendered. During the year, Cooper receives $16,500 from all customers, $3,700 of which is received from cash customers. Required: What amount of revenue should be shown on the income statement for the year?
1. Borrows $8,500 of cash from the bank by signing a formal agreement to repay the loan in 2 years. 2. Buys $6,800 of new equipment on account. 3. Pays off $4,800 of accounts payable. 4. Pays off $2,400 of notes payable. Required: a. Show the effect of these transactions on the basic accounting equation. b. Prepare the journal entries that would be used to record the transactions. Complete this question by entering your answers in the tabs below. Required A Required B Show the effect of these transactions on the basic accounting equation. (Enter any decreases to account balances with a minus sign.) Transaction Analysis Liabilities 1. Cash 2. Equipment 3. Assets Accounts Pavable 35,261 31 3,200 = Accounts Payable 6,800 - Accounts Payable II 3,200 + (6,800) + tv Stockholders' Equity Next > = CALONG X Help Sav C
New Wave Images is a graphics design firm that prepares its financial statements using a calendar year. Manny Kinn, the company treasurer and vice president of finance, has prepared a classified balance sheet as of December 31. In January, this balance sheet will be submitted along with an application for a loan from First Peoples Community Bank. An excerpt from the balance sheet follows: Cash Accounts receivable ...... Total assets $ 25,000 85,000 $250,000 The accounts receivable balance includes a $56,000 loan to Tom Morrow, the company presi- dent. Tom borrowed the money from New Wave 18 months earlier for a down payment on a new home. Tom has orally assured Manny that he will pay off the loan within the next year. Because Tom is the company president, Manny treats the amount due as a trade account receiv- able. In addition, Manny knows that the bank will consider a large balance in trade accounts receivable more favorably than a large personal loan to a single individual. Manny…
Below were selected transactions of FDNACCT Services for the month of September: • Paid rent for the month, P43,000 • Received the electricity bill, P17,000 • Paid salary of the secretary, P29,000 • Paid water bill, $4,400 Based on these transactions alone, how much was the total amount credited to Cash account?
New Wave Images is a graphics design firm that prepares its financial statements using a calendar year. Manny Kinn, the company treasurer and vice president of finance, has prepared a classified balance sheet as of December 31. In January, this balance sheet will be submitted along with an application for a loan from First Peoples Community Bank. An excerpt from the balance sheet follows: Cash:$25,000 Accounts receivable: $85,000 Total Assets: $250,000 The accounts receivable balance includes a $56,000 loan to Tom Morrow, the company president. Tom borrowed the money from New Wave 18 months earlier for a down payment on a new home. Tom has orally assured Manny that he will pay off the loan within the next year. Because Tom is the company president, Manny treats the amount due as a trade account receivable. In addition, Manny knows that the bank will consider a large balance in trade accounts receivable more favorably than a large personal loan to a single individual. Manny reported…
On November 10, JumpStart provides $2,170 in services to clients. At the time of service, the clients paid $650 in cash and put the balance on account. Required: (a) Journalize this event.* (b) On November 20, JumpStart’s clients paid an additional $560 on their accounts due. Journalize this event.* (c) Calculate the accounts receivable balance on November 30. *Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTSJumpStartGeneral Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Office Supplies 14 Prepaid Insurance 15 Land 16 Office Equipment 17 Building 18 Truck LIABILITIES 21 Notes Payable 22 Accounts Payable 23 Unearned Revenue EQUITY 31 JumpStart, Capital 32 JumpStart, Drawing REVENUE 41 Fees Earned EXPENSES 51 Wages Expense 53 Rent Expense 54 Utilities Expense 55 Maintenance Expense 59 Miscellaneous Expense (a) On November 10, JumpStart…