The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period: 1. Performed $94,500 of services for clients on account. 2. Performed $53,000 of services for cash. 3. Incurred $54,000 of other operating expenses on account. 4. Paid $21,500 cash to an employee for salary. 5. Collected $67,000 cash from accounts receivable. 6. Paid $37,000 cash on accounts payable. 7. Paid a $8,000 cash dividend to the stockholders. 8. Accrued salaries were $4,600 at the end of Year 1. Required a. Show the effects of the events on the financial statements using a horizontal statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is shown as an example. (Enter any decreases to account balances and cash outflows with a minus sign.) b. What is the amount of total assets at the end of Year 1? c. What is the balance of accounts receivable at the end of Year 1? d. What is the balance of accounts payable at the end of Year 1? f. What is net income for Year 1? g. What is the amount of net cash flow from operating activities for Year 1?
The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period: 1. Performed $94,500 of services for clients on account. 2. Performed $53,000 of services for cash. 3. Incurred $54,000 of other operating expenses on account. 4. Paid $21,500 cash to an employee for salary. 5. Collected $67,000 cash from accounts receivable. 6. Paid $37,000 cash on accounts payable. 7. Paid a $8,000 cash dividend to the stockholders. 8. Accrued salaries were $4,600 at the end of Year 1. Required a. Show the effects of the events on the financial statements using a horizontal statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is shown as an example. (Enter any decreases to account balances and cash outflows with a minus sign.) b. What is the amount of total assets at the end of Year 1? c. What is the balance of accounts receivable at the end of Year 1? d. What is the balance of accounts payable at the end of Year 1? f. What is net income for Year 1? g. What is the amount of net cash flow from operating activities for Year 1?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Check my w
The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period:
1. Performed $94,500 of services for clients on account.
2. Performed $53,000 of services for cash.
3. Incurred $54,000 of other operating expenses on account.
4. Paid $21,500 cash to an employee for salary.
5. Collected $67,000 cash from accounts receivable.
6. Paid $37,000 cash on accounts payable.
7. Paid a $8,000 cash dividend to the stockholders.
8. Accrued salaries were $4,600 at the end of Year 1.
Required
a. Show the effects of the events on the financial statements using a horizontal statements model like the following one. In the Cash
Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and
NA to indicate the element is not affected by the event. The first event is shown as an example. (Enter any decreases to account
balances and cash outflows with a minus sign.)
b. What is the amount of total assets at the end of Year 1?
c. What is the balance of accounts receivable at the end of Year 1?
d. What is the balance of accounts payable at the end of Year 1?
f. What is net income for Year
g. What is the amount of net cash flow from operating activities for Year. 1?
Complete this question by entering your answers in the tabs below.
Transcribed Image Text:LEWIS AND HARPER
Statements Model
For Accounting Year 1
Stockholders'
+
Income Statement
Statement of Cash
Flow
Assets
Liabilities
%3D
Event
Equity
Salaries
+
Retained
Accounts
Receivable
- Expense
No.
Accounts
Revenue
= Net Income
Cash
Payable
Payable
Earnings
94.500
94,500
94,500
NA
1.
+
94.500 =
+
2.
+
3.
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+
4.
+
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5.
+
+
6.
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+
7.
+
+
8.
+
94,500
of
94,500
94,500
Ol=
94,500
=
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Totals
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Req B to F>
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