a. Show the effects of these transactions on the financial statements using a horizontal statements model like the example shown here. Use a + to indicate increase or a - for decrease. if the element is not affected, leave the cell blank. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). (Not all cells will require entry.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The Chair Company provides a 120-day parts-and-labor warranty on all merchandise it sells. The Chair Company estimates the
warranty expense for the current period to be $1,090. During the period a customer returned a product that cost $818 to repair.
Required
a. Show the effects of these transactions on the financial statements using a horizontal statements model like the example shown
here. Use a + to indicate increase or a – for decrease. if the element is not affected, leave the cell blank. In the Cash Flow column,
indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). (Not all cells will require
entry.)
CHAIR COMPANY
Horizontal Statements Model
Balance Sheet
Income Statement
Statement of
Stockholder's
Equity
Event
Assets
Liabilities +
Revenue
Expense = Net Income
Cash Flow
Estimates
Paid
Transcribed Image Text:The Chair Company provides a 120-day parts-and-labor warranty on all merchandise it sells. The Chair Company estimates the warranty expense for the current period to be $1,090. During the period a customer returned a product that cost $818 to repair. Required a. Show the effects of these transactions on the financial statements using a horizontal statements model like the example shown here. Use a + to indicate increase or a – for decrease. if the element is not affected, leave the cell blank. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). (Not all cells will require entry.) CHAIR COMPANY Horizontal Statements Model Balance Sheet Income Statement Statement of Stockholder's Equity Event Assets Liabilities + Revenue Expense = Net Income Cash Flow Estimates Paid
Expert Solution
Step 1

Horizontal Statement Model

Financial statement elements is arranged  horizontally across a page in horizontal model.

Balance sheet is presented to the left. Income statement and the statement of cash flows is presented after balance sheet

 

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