Chapter 7, Problem 13AE

a)

To determine

Present the credit card sales and collection of accounts receivable in a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element is not affected by the event.

b)

To determine

Determine the following amounts:

1. (1) The amount of total assets at the end of the accounting period.
2. (2) The amount of revenue reported on the income statement.
3. (3) The amount of cash flows from operating activities reported on the statement of cash flows and
4. (4) The amount of cost incurred, if the company would maintain its own accounts receivables and by accepting credit cards.