1. Recognized $84,000 of revenue on account. 2. Collected $78,000 cash from accounts receivable. 3. Wrote off uncollectible accounts of $1,300. 4. Recognized uncollectible accounts expense. Grover estimated that uncollectible accounts expense will be 2 percent of sales on account Required: a. Show the effect of each event on the elements of the financial statements, using a horizontal statements model like the one shown next. The first transaction is entered as an example. Note: Use + for increase, - for decrease, or +/- for increase and decrease. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Not all cells will require input. Event Number Assets 1. 2 3 4 +- . . Balance Sheet Liabilities . . Horizontal Statements Model Stockholders Equity Revenue Income Statement Expense Net Income Statement of Cash Flows

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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1. Recognized $84,000 of revenue on account.
2. Collected $78,000 cash from accounts receivable.
3. Wrote off uncollectible accounts of $1,300.
4. Recognized uncollectible accounts expense. Grover estimated that uncollectible accounts expense will be 2 percent of sales on
account
Required:
a. Show the effect of each event on the elements of the financial statements, using a horizontal statements model like the one shown
next. The first transaction is entered as an example.
Note: Use + for increase,- for decrease, or +/-for increase and decrease. In the Statement of Cash Flows column, indicate
whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Not all cells will require input.
Event
Number Assets
1.
2
3
4
•
+-
+/-
•
.
.
Balance Sheet
Liabilities
.
•
.
+
Horizontal Statements Model
Stockholders
Equity
Revenue
Income Statement
Expense
.
Net Income
Statement of Cash
Flows
Transcribed Image Text:1. Recognized $84,000 of revenue on account. 2. Collected $78,000 cash from accounts receivable. 3. Wrote off uncollectible accounts of $1,300. 4. Recognized uncollectible accounts expense. Grover estimated that uncollectible accounts expense will be 2 percent of sales on account Required: a. Show the effect of each event on the elements of the financial statements, using a horizontal statements model like the one shown next. The first transaction is entered as an example. Note: Use + for increase,- for decrease, or +/-for increase and decrease. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Not all cells will require input. Event Number Assets 1. 2 3 4 • +- +/- • . . Balance Sheet Liabilities . • . + Horizontal Statements Model Stockholders Equity Revenue Income Statement Expense . Net Income Statement of Cash Flows
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