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Cherokee Company began operations when it issued common stock for $82,500 cash. It paid $74,250 cash in advance for a one-year contract to lease delivery equipment for the business. It signed the lease agreement on March 1, 2016, which was effective immediately. Cherokee received $94,875 of cash revenue in 2016.

Required

a.

Record the March 1 cash payment in general journal format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Record in general journal format the adjustment required as of December 31, 2016. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) c. Record all events in a horizontal statements model. (Do not round intermediate calculations. Record the event as they are occurred in question data. Any decrease in account balances should be indicated with a minus sign. In the Statement of Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event.) What amount of net income will Cherokee Company report on the 2016 income statement? (Do not round intermediate calculations.) d-2. What is the amount of net cash flow from operating activities for 2016? e. Determine the amount of prepaid rent Cherokee Company would report on the December 31, 2016, balance sheet. (Do not round intermediate calculations.)

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