60.1K

Verified Solution

Link Copied!

4 Event Statement of Cash Flows book Assets Cash Accounts Receivable 70,000 40,000 1 + LEWIS AND HARPER Horizontal Financial Statement Model For Accounting Year 1 Liabilities Stockholders Income Statement Equity Accounts Salaries Retained Payable = Net Income Revenue Payable Expense Earnings 70,000 70,000 70,000 40,000 36.000 10.000 (47.000) (16.000) . + 2 3 References 4 . (47,000) (16,000) 5 6 7 8 Totals 24.000 23,000 20,000 0. 63,000 70,000 (0.000) 70,000 The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period: 1. Performed $70,000 of services for clients on account Performed $40,000 of services for cash & incurred $36,000 of other operating expenses on account 1. Paid $10,000 cash to an employee for salary 5. Collected $47,000 cash from accounts receivable, 3. Pald $16,000 cash on accounts payable. Paid an $8,000 cash dividend to the stockholders. 1. Accrued salaries were $2,000 at the end of Year 1. Required a. Show the effects of the events on the horizontal financial statements model like the following one. In the Statement of Cash Flows column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash The first event is recorded as an example. 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? 1. What is net income for Year 1? g. What is the amount of net cash flow from operating activities for Year 1

Answer & Explanation Solved by verified expert

See Answer