2024 – Problem 1 34 Recording events in a horizontal statements model LO 1 2 1 3 1 4 1 5 1 6 1 7
ACCT 505 Chapter 1 and Chapter 2-Section 1 Homework – 2024
Problem 1-34 Recording events in a horizontal statements model LO 1-2, 1-3, 1-4, 1-5, 1-6, 1-7
[The following information applies to the questions displayed below.]
Davidson Company was started on January 1, 2014, and experienced the following events during its first year of operation:
1. Acquired $31,000 cash from the issue of common stock.
2. Borrowed $43,000 cash from National Bank.
3. Earned cash revenues of $59,000 for performing services.
4. Paid cash expenses of $50,500.
5. Paid a $2,100 cash dividend to the stockholders.
6. Acquired an additional $31,000 cash from the issue of common stock.
7. Paid $11,000 cash to reduce the principal balance of the bank note.
8. Paid $50,000 cash to purchase land.
9. Determined that the market value of the land is $70,000.
Problem 1-34 Part b
Determine the amount of total assets that Davidson would report on the December 31, 2014, balance sheet.
Exercise 2-4 Effect of accounts receivable and accounts payable transactions on financial statements LO 2-1, 2-2
The following events apply to Brown and Birgin, a public accounting firm, for the 2014 accounting period:
1.
Performed $99,500 of services for clients on account.
2.
Performed $55,000 of services for cash.
3.
Incurred $58,000 of other operating expenses on account.
4.
Paid $22,500 cash to an employee for salary.
5.
Collected $69,000 cash from accounts receivable.
6.
Paid $18,000 cash on accounts payable.
7.
Paid a $7,000 cash dividend to the stockholders.
8.
Accrued salaries were $5,000 at the end of 2014.
Required
a.Show the effects of the events on the financial statements using a horizontal statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is recorded as an example. (Enter any decreases to account balances and cash outflows with a minus sign.)
b. What is the amount of total assets at the end of 2014?
What is the balance of accounts receivable at the end of 2014?
What is the balance of accounts payable at the end of 2014?
What is net income for 2014?
What is the amount of net cash flow from operating activities for 2014?
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