Required information[The following information applies to the questions displayed below.]The following transactions apply to Jova Company for 2018, the first year of operation:1. Issued $10,000 of common stock for cash.2. Recognized $210,000 of service revenue earned on account.3. Collected $162,000 from accounts receivable.4. Paid operating expenses of $125,000.5. Adjusted accounts to recognize uncollectible accounts expense. Jova uses the allowance method of accounting foruncollectible accounts and estimates that uncollectible accounts expense will be 1 percent of sales on account.The following transactions apply to Jova for 2019:1. Recognized $320,000 of service revenue on account.2. Collected $335,000 from accounts receivable.3. Determined that $2,150 of the accounts receivable were uncollectible and wrote them off.4. Collected $800 of an account that had previously been written off.5. Paid $205,000 cash for operating expenses.6. Adjusted the accounts to recognize uncollectible accounts expense for 2019. Jova estimates uncollectible accountsexpense will be 0.5 percent of sales on account.RequiredComplete the following requirements for 2018 and 2019. Complete all requirements for 2018 prior to beginning therequirements for 2019.b. Show the effect of each transaction on the elements of the financial statements, using a horizontal statements model like the oneshown here. Use + for increase and – for decrease; leave the cell blank if there is no effect. Also, in the Cash Flow column, indicatewhether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction is entered as anexample. (Hint Closing entries do not affect the statements model.) (If there is no effect on the Statement of Cash Flow, leave thecell blank.) b. Show the effect of each transaction on the elements of the financial statements, using a horizontal statements model like the oneshown here. Use + for increase and – for decrease; leave the cell blank if there is no effect. Also, in the Cash Flow column, indicatewhether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction is entered as anexample. (Hint Closing entries do not affect the statements model.) (If there is no effect on the Statement of Cash Flow, leave thecell blank.)JOVA COMPANYHorizontal Statements ModelEventNo.Statement of CashFlowAssets= Liabilities +EquityRevenues - Expenses =Net Income20181.FA+%3D+2.+3.+4.+5.20191.2.+3.4a.4b.+5.+6.

Under Horizontal Statement Model, Transactions to be classified according to the accounting…

Answered: b. Show the effect of each transaction…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Required information [The following information applies to the questions displayed below.] The following transactions apply to Jova Company for Year 1, the first year of operation: 1. Issued $10,000 of common stock for cash. 2. Recognized $210,000 of service revenue earned on account. 3. Collected $162,000 from accounts receivable. 4. Paid operating expenses of $125,000. 5. Adjusted accounts to recognize uncollectible accounts expense. Jova uses the allowance method of accounting for uncollectible accounts and estimates that uncollectible accounts expense will be 1 percent of sales on account. The following transactions apply to Jova for Year 2: 1. Recognized $320,000 of service revenue on account. 2. Collected $335,000 from accounts receivable. 3. Determined that $2,150 of the accounts receivable were uncollectible and wrote them off. 4. Collected $800 of an account that had previously been written off. 5. Paid $205,000 cash for operating expenses. 6. Adjusted the accounts to…
which of the following items appear within multiple financial statements? a). net income(or net loss) and cash. b).ending capital balance end net income(or net loss) c). cash and withdrawals d). ending capital balance and withdrawals
Directions: Fill in the following table using the equation: ∆Cash = - ∆Noncash Assets + ∆Liabilities + ∆Stockholders Equity. Indicate the name of the noncash asset, liability, or equity account affected by the transaction and if change in cash is classified as operating (O), investing (I), financing (F), or noncash (NC). The first line has been completed for you as an exampleItem∆Cash = - ∆Noncash Assets + ∆Liabilities + ∆Stockholders Equity1. Prepaid office rent for cash -O = - + Prepaid Rent + + 2. Sale of land held for cash = - + + 3. Cash payment of taxes payable = - + + 4. Issue preferred stock to investors for cash = - + + 5. Purchase equipment that is financed directly by the seller = - + + 6. Paid cash dividend = - + + 7. Pay notes payable = - + + 8. Pay interest payable = - + +
Which is not a required component of a complete set of financialstatements under PAS 1? A. Statement of changes in equityB. Statement of retained earningsC. Notes to financial statementsD. Statement of cash flows
Identify each of the following transactions as an operating activity (O), an investing activity (I), a financing activity (F), a noncash investing and financing activity (NIF), or a transaction that is not disclosed on the cash flow statement (N). In addition, indicate the effect that each of the following transactions has on the cash balance. Use + for increase, - for decrease, and 0 for no change. Assume the direct method is used to report cash flows from operating activities. ________ a) Purchase a building by issuance of common shares ________ b) Collection of accounts receivable ________ c) Payment of corporate income tax ________ d) Sale of merchandise on account ________ e) Payment of accounts payable ________ f) Receipt of cash dividends
2. Another name for the balance sheet is the .. a. statement to financial position. C. statement of cash ows. b. statement of operations. d. statement of retained earnings.
Which of the following is not a financial statement? Multiple Choice All of the above are financial statements. Income Statement. Statement of Changes in Assets. Balance Sheet. Statement of Cash Flows.
Identify how each of the following separate transactions 1 through 10 affects financial statements. For increases, place a "+" and the dollar amount in the column or columns. For decreases, place a "-" and the dollar amount in the column or columns. Some cells may contain both an increase (+) and a decrease (-) along with dollar amounts. The first transaction is completed as an example. Required: a. For the balance sheet, identify how each transaction affects total assets, total liabilities, and total equity. For the income statement, identify how each transaction affects net income. b. For the statement of cash flows, identify how each transaction affects cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. Transaction 1. Owner invests $900 cash in business in exchange for stock 2. Receives $700 cash for services provided 3. Pays $500 cash for employee wages 4. Buys $100 of equipment on credit 5. Purchases $200 of…
After closing entries are posted, the ending balance of Retained Earnings on the general ledger should: agree with the retained earnings balance in the income statement. be zero. agree with the retained earnings balance in the balance sheet. agree with the retained earnings balance in the statement of cash flows.
In the Excel, or spreadsheet, approach to recording financial transactions, cash paid to creditors is recorded as a decrease in the Cash column and as a decrease in the Retained Earnings column.
Identify whether certain adjustments on the cash flow statement, operating activities section, will increase or decrease net income I just need some examples of when to do this for an accounting exam - no data to provide you.
b) statement of cashflow is an important part of financial statement.outline the importance of statement of cashflow. Answer both the subparts a and b.

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