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

ekkarill92 answered 1 year ago
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