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

ekkarill92 answered 10 months ago

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