Question
In: Accounting
Problem 2-32 Recording events in a horizontal statements model The following events pertain to Super Cleaning...
Problem 2-32 Recording events in a horizontal statements model
The following events pertain to Super Cleaning Company:
Acquired $10,000 cash from the issue of common stock.
Provided $15,000 of services on account.
Page 85
Provided services for $5,000 cash.
Received $2,800 cash in advance for services to be performed in the future.
Collected $12,200 cash from the account receivable created in Event 2.
Paid $1,900 for cash expenses.
Performed $1,400 of the services agreed to in Event 4.
Incurred $3,600 of expenses on account.
Paid $4,800 cash in advance for one-year contract to rent office space.
Paid $2,800 cash on the account payable created in Event 8.
Paid a $1,500 cash dividend to the stockholders.
Recognized rent expense for nine months’ use of office space acquired in Event 9.
Required
Show the effects of the events on the financial statements using a horizontal statements model like the following one. In the Cash Flows column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. Use NA to indicate accounts not affected by the event. The first event is recorded as an example.
|
Super Cleaning Company Effect of Events on the Financial Statements |
|||||||||||||||||||||||
|
Balance Sheet |
Income Statement |
Stmt. of |
|||||||||||||||||||||
|
Assets |
= |
Liabilities |
+ |
Stockholders’ Equity |
Rev. |
- |
Exp. |
= |
Net Inc. |
Cash Flows |
|||||||||||||
|
Event No. |
Cash |
+ |
Accts Rec. |
+ |
Pp. Rent |
= |
Accts. Pay. |
+ |
Unearn Rev. |
+ |
Com. Stock |
+ |
Ret. Earn. |
||||||||||
|
1. |
10,000 |
+ |
NA |
+ |
NA |
= |
NA |
+ |
NA |
+ |
10,000 |
+ |
NA |
NA |
- |
NA |
= |
NA |
10,000 FA |
||||
|
2. |
+ |
+ |
= |
+ |
+ |
+ |
- |
= |
|||||||||||||||
|
3. |
+ |
+ |
= |
+ |
+ |
+ |
- |
= |
|||||||||||||||
|
4. |
+ |
+ |
= |
+ |
+ |
+ |
- |
= |
|||||||||||||||
|
5. |
+ |
+ |
= |
+ |
+ |
+ |
- |
= |
|||||||||||||||
|
6. |
+ |
+ |
= |
+ |
+ |
+ |
- |
= |
|||||||||||||||
|
7. |
+ |
+ |
= |
+ |
+ |
+ |
- |
= |
|||||||||||||||
|
8. |
+ |
+ |
= |
+ |
+ |
+ |
- |
= |
|||||||||||||||
|
9. |
+ |
+ |
= |
+ |
+ |
+ |
- |
= |
|||||||||||||||
|
10. |
+ |
+ |
= |
+ |
+ |
+ |
- |
= |
|||||||||||||||
|
11. |
+ |
+ |
= |
+ |
+ |
+ |
- |
= |
|||||||||||||||
|
12. |
+ |
+ |
* |
= |
+ |
+ |
+ |
- |
= |
||||||||||||||
|
Bal. |
$ |
+ |
$ |
= |
$ |
+ |
$ |
+ |
$ |
$ |
- |
$ |
$ |
$ |
= |
||||||||
*$ x /12 = $
Solutions
Expert Solution
SOLUTION:
| Super Cleaning Company | ||||||||||||||||||||||
| Effect of transactions on Financial Statements | ||||||||||||||||||||||
| Event no. | Balance sheet | Income Statement | Statrement of Cash Flows | |||||||||||||||||||
| Assets | = | Liabilities | + | Stockholders' Equity | Revenues | - | Expenses | = | Net Income | |||||||||||||
| Cash | + | Accts. Rec. | + | Prepaid Rent | = | Accts Pay. | + | Unearned Rev. | + | Common stock | + | Retained Earnings | ||||||||||
| 1 | $10,000.00 | + | NA | + | NA | = | NA | + | NA | + | $10,000.00 | + | NA | NA | - | NA | = | NA | $10,000.00 | FA | ||
| 2 | NA | + | $15,000.00 | + | NA | = | NA | + | NA | + | NA | + | $15,000.00 | $15,000.00 | - | NA | = | $15,000.00 | NA | |||
| 3 | $5,000.00 | + | NA | + | NA | = | NA | + | NA | + | NA | + | $5,000.00 | $5,000.00 | - | NA | = | $5,000.00 | $5,000.00 | OA | ||
| 4 | $2,800.00 | + | NA | + | NA | = | NA | + | $2,800.00 | + | NA | + | NA | NA | - | NA | = | NA | $2,800.00 | OA | ||
| 5 | $12,200.00 | + | -$12,200.00 | + | NA | = | NA | + | NA | + | NA | + | NA | NA | - | NA | = | NA | $12,200.00 | OA | ||
| 6 | -$1,900.00 | + | NA | + | NA | = | NA | + | NA | + | NA | + | -$1,900.00 | NA | - | $1,900.00 | = | -$1,900.00 | -$1,900.00 | OA | ||
| 7 | NA | + | NA | + | NA | = | NA | + | -$1,400.00 | + | NA | + | $1,400.00 | $1,400.00 | - | NA | = | $1,400.00 | NA | |||
| 8 | NA | + | NA | + | NA | = | $3,600.00 | + | NA | + | NA | + | -$3,600.00 | NA | - | $3,600.00 | = | -$3,600.00 | NA | |||
| 9 | -$4,800.00 | + | NA | + | $4,800.00 | = | NA | + | NA | + | NA | + | NA | NA | - | NA | = | NA | -$4,800.00 | OA | ||
| 10 | -$2,800.00 | + | NA | + | NA | = | -$2,800.00 | + | NA | + | NA | + | NA | NA | - | NA | = | NA | -$2,800.00 | OA | ||
| 11 | -$1,500.00 | + | NA | + | NA | = | NA | + | NA | + | NA | + | -$1,500.00 | NA | - | NA | = | NA | -$1,500.00 | FA | ||
| 12 | NA | + | NA | + | -$3,600.00 | = | NA | + | NA | + | NA | + | -$3,600.00 | NA | - | $3,600.00 | = | -$3,600.00 | ||||
| + | + | = | + | + | + | - | = | |||||||||||||||
| Bal. | $19,000.00 | + | $2,800.00 | + | $1,200.00 | = | $800.00 | + | $1,400.00 | + | $10,000.00 | + | $10,800.00 | $21,400.00 | - | $9,100.00 | = | $12,300.00 | $19,000.00 | NC | ||
Rent expense to be recognized = $4800*9/12 = $3,600
ekkarill92 answered 1 year agoRelated Solutions
The following events pertain to Super Cleaning Company: 1. Acquired $10,000 cash from the issue of...
The following events pertain to Super Cleaning Company:
1. Acquired $10,000 cash from the issue of common stock.
2. Provided $15,000 of services on account.
3. Provided services for $5,000 cash.
4. Received $2,800 cash in advance for services to be performed in
the future.
5. Collected $12,200 cash from the account receivable created in
Event 2.
6. Paid $1,900 for cash expenses.
7. Performed $1,400 of the services agreed to in Event 4.
8. Incurred $3,600 of expenses on...
The following events pertain to Super Cleaning Company: Acquired $15,200 cash from the issue of common...
The following events pertain to Super Cleaning Company:
Acquired $15,200 cash from the issue of common stock.
Provided $13,200 of services on account.
Provided services for $4,200 cash.
Received $2,600 cash in advance for services to be performed in
the future.
Collected $9,200 cash from the account receivable created in
Event 2.
Paid $5,200 for cash expenses.
Performed $1,300 of the services agreed to in Event 4.
Incurred $1,700 of expenses on account.
Paid $1,200 cash in advance for one-year...
Problem 1-35 Recording events in a horizontal statements model CHECK FIGURES a. Net Income: $23,000 e....
Problem 1-35 Recording events in a
horizontal statements model
CHECK FIGURES
a. Net Income: $23,000
e. Net Cash Flow from
Operating Activities: $23,000
Maben Company was
started on January 1, 2018, and experienced the following events
during its first year of operation:
Acquired $30,000 cash from the issue of common stock.
Borrowed $40,000 cash from National Bank.
Page 45
Earned cash revenues of $48,000 for performing services.
Paid cash expenses of $25,000.
Paid a $1,000 cash dividend to the stockholders....
GBA 5205 Survey of Accounting Fifth Edition by Edmonds (ISBN 9781307078473) Problem 2-32 Recording events in...
GBA 5205
Survey of Accounting Fifth Edition by Edmonds (ISBN
9781307078473)
Problem 2-32
Recording events in a horizontal statements model
The following events pertain to Super Cleaning Company:
1. Acquired $10,000 cash from the issue of common stock.
2. Provided $15,000 of services on account.
3. Provided services for $5,000 cash.
4. Received $2,800 cash in advance for services to be performed
in the future.
5. Collected $12,200 cash from the account receivable created in
Event 2.
6. Paid $1,900...
2. Illustrate the effects on the accounts and financial statements of recording the following transactions. For...
2. Illustrate the effects on the accounts and
financial statements of recording the following transactions. For
decreases in accounts or outflows of cash, enter your answers as
negative numbers. If no account or activity is affected, select "No
effect" from the dropdown and leave the corresponding number entry
box blank.
a. On December 31, Gemini Company determined that $3,000,000 of
goodwill was impaired.
Statement of Cash
Flows
Balance Sheet
Assets
=
Liabilities
+
Stockholders' Equity
Accounts receivable
+
No effect...
Problem 2-35 Effect of events on financial statements LO 2-1, 2-2, 2-3, 2-4, 2-5, 2-6 Davis...
Problem 2-35 Effect of events on financial statements LO 2-1,
2-2, 2-3, 2-4, 2-5, 2-6 Davis Company had the following balances in
its accounting records as of December 31, 2013: Assets Liabilities
and Equity Cash $ 46,000 Accounts Payable $ 22,000 Accounts
Receivable 50,000 Common Stock 85,000 Land 30,000 Retained Earnings
19,000 Totals $ 126,000 $ 126,000 The following accounting events
apply to Davis for 2014: Jan. 1 Acquired an additional $46,000 cash
from the issue of common stock. April...
The following events pertain to Link's Surf Shop for October 2012. The company uses PERPETUAL INVENTORY...
The following events pertain to Link's
Surf Shop for October 2012. The company uses PERPETUAL
INVENTORY METHOD.
Record the following transactions in
horizontal statements model.
Oct. 2 Purchased $22,000 of
merchandise on account with the terms 2/10, n/30
Oct. 3 Sold merchandise that cost
$10,000 for $18,000 to customers on account with the terms 1/10,
n/30.
Oct. 4 Returned $2,000 of defective
merchandise from the Oct. 2 purchase.
Oct.10 Paid the amount due on the
merchandise purchased on Oct....
32. Which of the following statements is NOT an advantage of a swap transaction? A. It...
32.
Which of the following statements is NOT an advantage of a swap
transaction?
A.
It usually allows the company to achieve a lower cost of
funds.
B.
It is used to hedge both interest rate risk and foreign exchange
risk.
C.
It facilitates the restructuring of cash flows associated with
existing borrowings.
D.
It transfers the credit risk to the counterparty.
why d is not correct???
2-6. Effect of accruals on the financial statements Cordell Inc. experienced the following events in 2018,...
2-6. Effect of accruals on the financial
statements
Cordell Inc. experienced the following events in 2018,
its first year of operation:
1. Received $40,000 cash from the issue of common
stock.
2. Performed services on account for
$82,000.
3. Paid a $6,000 cash dividend to the
stockholders.
4. Collected $76,000 of the accounts
receivable.
5. Paid $53,000 cash for other operating
expenses.
6. Performed services for $19,000 cash.
7. Recognized $3,500 of accrued utilities expense at the
end of the...
Rosie Dry Cleaning was started on January 1, Year 1. It experienced the following events during...
Rosie Dry Cleaning was started on January 1, Year 1. It
experienced the following events during its first two years of
operation:
Events Affecting Year 1
Provided $25,990 of cleaning services on account.
Collected $20,792 cash from accounts receivable.
Adjusted the accounting records to reflect the estimate that
uncollectible accounts expense would be 1 percent of the cleaning
revenue on account.
Events Affecting Year 2
Wrote off a $195 account receivable that was determined to be
uncollectible.
Provided $30,330 of...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Discuss the significance of a proposal What elements do you think are needed for the proposal...
- 1) Given the following equations: QD = 5,000 + 0.5 I + 0.2 A -...
- How has the Supreme Court's Citizens United decision changed campaigns in America? (long answer is appreciated...
- You are a Derivatives Trader at a major Broker-Dealer. At the end of the week you...
- What are the two reasons that limit the ability of correlational studies to provide information on...
- Suppose that 20 monthly payments of $100 each are followed by 30 monthly payments of $200...
- D. Explain what it means for recommendations to be specific and actionable. E. Discuss how charts...
ADVERTISEMENT