A sole proprietorship was established on January 1, Year 1, when it received $45,000 cash from Connor Howard, the owner. During Year 1, the business earned $92,000 in cash revenues and paid $72,000 in cash expenses. Howard withdrew $10,300 from the business during Year 1.**Required:**Indicate how each of the transactions and events for the Howard sole proprietorship affects the financial statements model below. Indicate dollar amounts of increases and decreases. For cash flows, indicate whether each is an operating activity (OA), investing activity (IA), or financing activity (FA).**Note:** Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed.| | Balance Sheet | | Income Statement | Statement of Cash Flows ||------------------------------------|-----------------------|-----------------------------------------|------------------------------------------|---------------------------|| | Assets = Liabilities + Owner’s Equity Howard, capital | Revenues - Expenses = Net Income | OA / IA / FA || | | | | || Transaction 1: Owner Investment | | +45,000 | | +45,000 (FA) || Transaction 2: Earned Revenues | +92,000 | | +92,000 (Revenues) | +92,000 (OA) || Transaction 3: Paid Expenses | | | -72,000 (Expenses) | -72,000 (OA) || Transaction 4: Owner Withdrawal | | -10,300 | | -10,300 (FA) || | | | | |This table outlines the impact of various transactions on the sole proprietorship’s balance sheet, income statement, and statement of cash flows. Transactions include owner investment, earned revenues, paid expenses, and owner withdrawal. Each transaction is categorized under relevant financial activities: operating activity (OA), investing activity (IA), or financing activity (FA).

Understanding the accounting equation is crucial when it comes to comprehending the financial position of a company at a specific point in time. It represents the relationship between a company's assets, liabilities, and equity and is often referred to as the "balance sheet equation." In simple terms, the accounting equation reflects the balance between a company's assets and the claims on those assets - liabilities and equity. The formula for the accounting equation is as follows:Assets = Liabilities + EquityAccounting Equation ModelBalance SheetIncome StatementEventsAssets= Liabilities +Owners' Equity Revenue - Expense = Net income Statement of Cash flows1 $ 45,000=+ $ 45,000-= $ 45,000FA2 $ 92,000=+ $ 92,000 $ 92,000-= $ 92,000 $ 92,000OA3-$72,000=+-$72,000- $72,000=-$72,000-$72,000OA4-$10,300=+-$10,300-=-$10,300FATotal $54,700= $ -+ $54,700 $ 92,000- $72,000= $20,000 $54,700Total Assets only include Cash $54,700

Business

Accounting

A sole proprietorship was established on January 1, Year 1, when it received $45,000 cash from Connor Howard, the owner. During Year 1, the business earned $92,000 in cash revenues and paid $72,000 in cash expenses. Howard withdrew $10,300 from the business during Year 1. Required: Indicate how each of the transactions and events for the Howard sole proprietorship affects the financial statements model, below. Indicate dollar amounts of increases and decreases. For cash flows, indicate whether each is an operating activity (OA), investing activity (IA), or financing activity (FA). Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Assets 11 """ Balance Sheet Liabilities + + Owner's Equity Howard, capital Revenues Income Statement Expenses | |||||| = Net Income Statement of Cash Flows

A sole proprietorship was established on January 1, Year 1, when it received $45,000 cash from Connor Howard, the owner. During Year 1, the business earned $92,000 in cash revenues and paid $72,000 in cash expenses. Howard withdrew $10,300 from the business during Year 1. Required: Indicate how each of the transactions and events for the Howard sole proprietorship affects the financial statements model, below. Indicate dollar amounts of increases and decreases. For cash flows, indicate whether each is an operating activity (OA), investing activity (IA), or financing activity (FA). Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Assets 11 """ Balance Sheet Liabilities + + Owner's Equity Howard, capital Revenues Income Statement Expenses | |||||| = 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

Problem 1Q

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Need assistance with Capital statement tab and checking to see if answeres are correct. I have checked and cross referenced and Beginning capital and plus capital amounts are incorrect.
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