(1) During Year 1, Hardy Merchandising Company purchased $15,000 of inventory on account. (2) Hardy sold inventory on account that cost $11,300 for $16,900. (3) Cash payments on accounts payable were $9,400. (4) There was $15,000 cash collected from accounts receivable. (5) Hardy also paid $3,500 cash for operating expenses. Assume that Hardy started the accounting period with $24,500 in both cash and common stock. Required: a. Identify the events described in the preceding paragraph and record them in a horizontal statements model like the following one. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). b. What is the balance of accounts receivable at the end of Year 1? c. What is the balance of accounts payable at the end of Year 1? d. What are the amounts of gross margin and net income for Year 1? e. Determine the amount of net cash flow from operating activities.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
(1) During Year 1, Hardy Merchandising Company purchased $15,000 of inventory on account. (2) Hardy sold inventory on account that
cost $11,300 for $16,900. (3) Cash payments on accounts payable were $9,400. (4) There was $15,000 cash collected from accounts
receivable. (5) Hardy also paid $3,500 cash for operating expenses. Assume that Hardy started the accounting period with $24,500 in
both cash and common stock.
Required:
a. Identify the events described in the preceding paragraph and record them in a horizontal statements model like the following one.
Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing
activities (FA),
b. What is the balance of accounts receivable at the end of Year 1?
c. What is the balance of accounts payable at the end of Year 1?
d. What are the amounts of gross margin and net income for Year 1?
e. Determine the amount of net cash flow from operating activities.
Complete this question by entering your answers in the tabs below.
Req A
Req B to E
Identify the events described in the preceding paragraph and record them in a horizontal statements model like the following one. Also, in the Statement of Cash Flows
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.
Transcribed Image Text:(1) During Year 1, Hardy Merchandising Company purchased $15,000 of inventory on account. (2) Hardy sold inventory on account that cost $11,300 for $16,900. (3) Cash payments on accounts payable were $9,400. (4) There was $15,000 cash collected from accounts receivable. (5) Hardy also paid $3,500 cash for operating expenses. Assume that Hardy started the accounting period with $24,500 in both cash and common stock. Required: a. Identify the events described in the preceding paragraph and record them in a horizontal statements model like the following one. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA), b. What is the balance of accounts receivable at the end of Year 1? c. What is the balance of accounts payable at the end of Year 1? d. What are the amounts of gross margin and net income for Year 1? e. Determine the amount of net cash flow from operating activities. Complete this question by entering your answers in the tabs below. Req A Req B to E Identify the events described in the preceding paragraph and record them in a horizontal statements model like the following one. Also, in the Statement of Cash Flows 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.
Complete this question by entering your answers in the tabs below.
Req A
Req B to E
What is the balance of accounts receivable, accounts payable, amounts of gross margin, net income and net cash flow from
operating activities at the end of Year 1?
Note: Indicate cash outflows with minus sign.
b. Accounts receivable
c. Accounts payable
d. Gross margin
d. Net income
e. Net cash flow from operating activities
< Req A
Req B to E >
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Req A Req B to E What is the balance of accounts receivable, accounts payable, amounts of gross margin, net income and net cash flow from operating activities at the end of Year 1? Note: Indicate cash outflows with minus sign. b. Accounts receivable c. Accounts payable d. Gross margin d. Net income e. Net cash flow from operating activities < Req A Req B to E >
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 1 images

Blurred answer
Knowledge Booster
Financial Statements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education