Required Explain how each of the following events or series of events and the related adjusting entry will affect the amount of net income and the amount of cash flow from operating activities reported on the year-end financial statements. Identify the direction of change (Increase or decrease) and the amount of the change. If there is no change, leave the cell blank. Organize your answers according to the following table. The first event is recorded as an example. If an event does not have a related adjusting entry, record only the effects of the event. (Not all cells will require entry. Do not round intermediate calculations.) a. Paid $2,500 cash on October 1 to purchase a one-year Insurance policy. b. Purchased $1,300 of supplies on account. Pald $850 cash on accounts payable. The ending balance In the Supplies account, after adjustment, was $250. c. Provided services for $7,700 cash. d. Collected $9,800 in advance for services to be performed in the future. The contract called for services to start on May 1 and to continue for one year. e. Accrued salaries amounting to $3,200. f. Sold land that cost $18,400 for $18,400 cash. g. Acquired $52,500 cash from the Issue of common stock. h. Earned $11,400 of revenue on account. Collected $10,260 cash from accounts receivable. 1. Pald cash for other operating expenses of $1,750. Net Income Cash Flows from Operating Activities Event/ Adjustment Direction of Direction Amount of Change Amount of of Change Change Change a. Adj. Decrease b. Adj. Decrease $ 2,500 825 C. Adj. d. Adj. e. Adj. f. Adj. g. Adj. h. Adj. i. Adj.
Required Explain how each of the following events or series of events and the related adjusting entry will affect the amount of net income and the amount of cash flow from operating activities reported on the year-end financial statements. Identify the direction of change (Increase or decrease) and the amount of the change. If there is no change, leave the cell blank. Organize your answers according to the following table. The first event is recorded as an example. If an event does not have a related adjusting entry, record only the effects of the event. (Not all cells will require entry. Do not round intermediate calculations.) a. Paid $2,500 cash on October 1 to purchase a one-year Insurance policy. b. Purchased $1,300 of supplies on account. Pald $850 cash on accounts payable. The ending balance In the Supplies account, after adjustment, was $250. c. Provided services for $7,700 cash. d. Collected $9,800 in advance for services to be performed in the future. The contract called for services to start on May 1 and to continue for one year. e. Accrued salaries amounting to $3,200. f. Sold land that cost $18,400 for $18,400 cash. g. Acquired $52,500 cash from the Issue of common stock. h. Earned $11,400 of revenue on account. Collected $10,260 cash from accounts receivable. 1. Pald cash for other operating expenses of $1,750. Net Income Cash Flows from Operating Activities Event/ Adjustment Direction of Direction Amount of Change Amount of of Change Change Change a. Adj. Decrease b. Adj. Decrease $ 2,500 825 C. Adj. d. Adj. e. Adj. f. Adj. g. Adj. h. Adj. i. Adj.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Explain how each of the following events or series of events and the related adjusting entry will affect the amount of net income and
the amount of cash flow from operating activities reported on the year-end financial statements. Identify the direction of change
(Increase or decrease) and the amount of the change. If there is no change, leave the cell blank. Organize your answers according to
the following table. The first event is recorded as an example. If an event does not have a related adjusting entry, record only the
effects of the event. (Not all cells will require entry. Do not round intermediate calculations.)
a. Paid $2,500 cash on October 1 to purchase a one-year Insurance policy.
b. Purchased $1,300 of supplies on account. Pald $850 cash on accounts payable. The ending balance In the Supplies account, after
adjustment, was $250.
c. Provided services for $7,700 cash.
d. Collected $9,800 in advance for services to be performed in the future. The contract called for services to start on May 1 and to
continue for one year.
e. Accrued salaries amounting to $3,200.
f. Sold land that cost $18,400 for $18,400 cash.
g. Acquired $52,500 cash from the Issue of common stock.
h. Earned $11,400 of revenue on account. Collected $10,260 cash from accounts receivable.
1. Pald cash for other operating expenses of $1,750.
Net Income
Cash Flows from
Operating Activities
Event/
Adjustment
Direction
of
Direction
Amount of
Change
Amount of
of
Change
Change
Change
a.
Adj.
Decrease
b.
Adj.
Decrease
$ 2,500
825
C.
Adj.
d.
Adj.
e.
Adj.
f.
Adj.
g.
Adj.
h.
Adj.
i.
Adj.
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