Question
In: Accounting
Describe the changes to the balance sheet, income statement, and statement of cash flows for the...
Describe the changes to the balance sheet, income statement, and statement of cash flows for the following transactions:
a. billing a client for a completed construction project
b. pay invoices for building materials
c. labor charged to a job
d. paying employees wages
e. signing a construction or development loan
Solutions
Expert Solution
|
a. billing a client for a completed construction project: |
|
|
Balnace sheet |
Increase in Asset (Accounts receivable/Cash) |
|
Income statement |
Increase in revenue |
|
Cash flows |
No effect if billing on credit basis (cash inflow if on cash basis) |
|
b. pay invoices for building materials |
|
|
Balnace sheet |
Decrease in cash |
|
Income statement |
increase in expenses |
|
Cash flows |
Cash outflows |
|
c. labor charged to a job |
|
|
Balnace sheet |
No effect |
|
Income statement |
Increase in expenses |
|
Cash flows |
No effect |
|
d. paying employees wages |
|
|
Balnace sheet |
No effect |
|
Income statement |
Increase in expenses |
|
Cash flows |
Cash outflows |
|
e. signing a construction or development loan |
|
|
Balnace sheet |
No effect (mere signing of a contract will not have impact on financial statements) |
|
Income statement |
No effect |
|
Cash flows |
No effect |
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