Required information[The following information applies to the questions displayed below.]The following transactions apply to Jova Company for 2018, the first year of operation:1. Issued $10,000 of common stock for cash.2. Recognized $210,000 of service revenue earned on account.3. Collected $162,000 from accounts receivable.4. Paid operating expenses of $125,000.5. Adjusted accounts to recognize uncollectible accounts expense. Jova uses the allowance method of accounting foruncollectible accounts and estimates that uncollectible accounts expense will be 1 percent of sales on account.The following transactions apply to Jova for 2019:1. Recognized $320,000 of service revenue on account.2. Collected $335,000 from accounts receivable.3. Determined that $2,150 of the accounts receivable were uncollectible and wrote them off.4. Collected $800 of an account that had previously been written off.5. Paid $205,000 cash for operating expenses.6. Adjusted the accounts to recognize uncollectible accounts expense for 2019. Jova estimates uncollectible accountsexpense will be 0.5 percent of sales on account.RequiredComplete the following requirements for 2018 and 2019. Complete all requirements for 2018 prior to beginning therequirements for 2019.b. Show the effect of each transaction on the elements of the financial statements, using a horizontal statements model like the oneshown here. Use + for increase and – for decrease; leave the cell blank if there is no effect. Also, in the Cash Flow column, indicatewhether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction is entered as anexample. (Hint Closing entries do not affect the statements model.) (If there is no effect on the Statement of Cash Flow, leave thecell blank.) b. Show the effect of each transaction on the elements of the financial statements, using a horizontal statements model like the oneshown here. Use + for increase and – for decrease; leave the cell blank if there is no effect. Also, in the Cash Flow column, indicatewhether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction is entered as anexample. (Hint Closing entries do not affect the statements model.) (If there is no effect on the Statement of Cash Flow, leave thecell blank.)JOVA COMPANYHorizontal Statements ModelEventNo.Statement of CashFlowAssets= Liabilities +EquityRevenues - Expenses =Net Income20181.FA+%3D+2.+3.+4.+5.20191.2.+3.4a.4b.+5.+6.

Under Horizontal Statement Model, Transactions to be classified according to the accounting…

Answered: b. Show the effect of each transaction…

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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Which of the following is not classified among the financing activities in a statement of cash flows? a Long-term borrowing. b Payment of dividends to stockholders. c Short-term borrowing. d Payment of interest to creditors.
In the Excel, or spreadsheet, approach to recording financial transactions, cash paid to creditors is recorded as a decrease in the Cash column and as a decrease in the Retained Earnings column.
3. Using the following answer keys, you are to identify in which activity each of the transactions is classified and its effect on cash flows. Cash Flow Classification...using the capital letter only: O...Operating Activity I...Investing Activity F...Financing Activity OI...Operating and Investing Activity N...Noncash Transaction Effect on Cash Flows...using the capital letter only: I...Increase D...Decrease N...No Effect Transaction Cash Flow Classification Effect on Cash Flows Declared and paid a cash dividend. Sold short-term trading securities at a gain. Retired fully depreciated equipment. Sold a machine at a loss. Purchased long-term available-for-sale securities. Decreased accounts receivable. Purchased 90-day Treasury bill. Incurred a net loss. Declared and issued a stock dividend. Sold treasury stock.
5. Using the following answer keys, you are to identify in which activity each of the transactions is classified and its effect on cash flows. Cash Flow Classification...using the capital letter only: O...Operating Activity I...Investing Activity F...Financing Activity OI...Operating and Investing Activity N...Noncash Transaction Effect on Cash Flows...using the capital letter only: I...Increase D...Decrease N...No Effect Transaction Cash Flow Classification Effect on Cash Flows Paid a cash dividend. Decreased accounts receivable. Increased inventory. Retired long-term debt with cash. Sold long-term securities at a loss. Issued stock for equipment. Decreased prepaid insurance. Purchased treasury stock with cash. Retired a fully depreciated truck (no gain or loss). Transferred cash to money market account.
expense in the income statement but would not appear in the balance sheet. The profit figure appears in all the following financial statements except the Balance sheet O Income statement Statement of cash flows Statement of changes in equity Which of the following types of
Place an X' in the appropriate columns for each of the following situations to indicate how amounts are classified and how or whether cash is affected: Effect on Cash Operating Investing Financing Activity Inflow (+) Situation Outflow No Activity Activity () Effect a. Paying off accounts payable with cash. b. Retirement of common stock with cash. e. Issuance of bonds for |cash. |d. Acquired land by issuing | common stock. e. Paid cash for inventory. E Collection of accounts receivable with customer cash.
Which pair of accounts follows the rules of debit and credit in relation to increases and decreases in the same manner? Select one: O A. Service Revenue and Equipment O B. Common Stock and Sales Revenue OC. Utilities Expense and Notes Payable D. Dividends Payable and Rent Expense
5. Which of the following statements is usually prepared second? * -Statement of Financial Position -Statement of Changes in Equity -Income Statement -Statement of Cash Flows
can you help me with the last part of the question Indicate whether the transaction increases (+), decreases (–), or increases and decreases (+/-) each element of the financial statements. Also, in the Statement of Cash Flows column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity, and leave blank for no effect. The first transaction is recorded as an example. (Not all cells require input.)
Indicate the effect of each of the following transactions on total assets, total liabilities, and total stockholders' equity. Select + for increase, for decrease, or No Effect. The first transaction is provided as an illustration. - a. Borrowed cash on a bank loan b. Paid an account payable c. Sold common stock d. Purchased merchandise inventory on account e. Declared and paid dividends f. Collected an account receivable g. Sold merchandise inventory on account at a profit h. Paid operating expenses in cash i. Repaid principal and interest on a bank loan Assets + Liabilities + Stockholders' Equity No Effect
Kindly indicate the impact of each transaction on balance sheet items i.e., Assets, Liabilities and Owner’s Equity in Table 1 Given Below………………………………. Use the Following signs for each transaction under the relevant item + The item is increased due to the transaction. – The item is decreased due to the transaction. + /- One item is increased and another is decreased due to the transaction. Table 1 S. No Transaction Assets Liabilities Equity 1 Investment made by the owner 2 Equipment purchased on account 3 Office equipment purchased with cash 4 1. A bank loan was received in cash by the firm 5 Equipment Sold 6 More Equipment were purchased with Cash 7 The loan lent by the bank was repaid by the firm 8 Cash Withdrawals by the owner 9 Cash received from an account customer 10 Purchased Land, paid half in…
Identify how each of the following separate transactions through 10 affects financial statements. For increases, place a "i" and the dollar amount in the column or columns. For decreases, place a"- and the dollar amount in the column or columns. Some cells may contain both an increase (+) and a decrease (-) along with dollar amounts. The first transaction is completed as an example. Required: a. For the balance sheet, identify how each transaction affects total essets, total abilities, and total equity For the income statement, identify how each transaction affects net income. b. For the statement of cash flows, identify how each transaction affects cash flows from operating activities, cash flows from investing activities, and cash flows from Snancing activities. Transaction 1. Owner invest $300 cash in business in exchange for vock 2 Rives $700 cash for services provided 3 Pays $500 cash for employee wages & Buys $100 of equipment on cred 5 Purchases $200 af supplies on credit &…

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