BE3.2 (LO 1), C Transactions that affect netincome do not necessarily affect cash. Identify theeffect, if any, that each of the followingtransactions would have upon cash and netincome. The first transaction has been completedas an example.a. Purchased $100 of supplies for cash.b. Recorded an adjusting entry to record useof $20 of the above supplies.c. Made sales of $1,300, all on account.d. Received $800 from customers in paymentof their accounts.e. Purchased equipment for cash, $2,500.f. Recorded depreciation of building forperiod used, $600.Indicate why adjusting entries are needed. Brief ExercisesIdentify the order of the five steps in the revenuerecognition process.BE3.1 (LO 1), K Number the following steps ofthe revenue recognition process (from 1-5) toplace in the correct order.Allocate the transaction priceto the separate performance obligations.а.b.Identify the contract withcustomers.Identify the separateperformance obligations in the contract.с.d.Recognize revenue when eachperformance obligation is satisfied.е.Determine the transactionprice.Identify impact of transactions on cash and netincome.

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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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1. From the following balances of Kalam Plc., as at 31.12.20 Prepare Financial statement. DEBIT CREDIT RO'000 RO'000 Trade receivables - Trade payables - Administration expenses Selling and Distribution Expenses - Dividend paid Interest paid - Audit fees Rent for office Revenue- Cost of sales- Motor vehicles (cost) Accumulated depreciation: Motor vehicles (1.1.20) Equipment (31.12.20) Accumulated depreciation: Equipment (1.1.20) Bank loan (10%) Retained earnings (1.1.20) Reserves and surplus Cash at bank Inventories (31.12.20) Share capital (£1) 2070 1800 2835 360 450 1440 162 22437 12960 15390 3519 32967 3240 5670 4500 4002 1200 54 2430 7290 62388 62388
Please answer the following using the image attached. Thank you 1. Cash Received from customers 2. Cash payment for Salaries 3. Cash payment for Operating Expenses 4. Cash payment for Income Tax 5. Cash Flows from Operating Activities 6. Cash Flows from Investing Activities 7. Cash Flows from Financing Activities 8. Cash flows from acquiring and selling products are classified as 9. Cash flows from acquiring and disposing long-term assets are classified as 10. Cash flows from borrowings and paying of debts are classified as
Statement 1: Dividends paid are deducted from net increase in net assetsto arrive at the net income. Statement 2: Cashbook is the major recordmaintained in a single entry system. A. Both statements are true.B. Both statements are false.C. Only statement 1 is true.D. Only statement 2 is true.
Under the accrual basis of accounting - if cash has been received before the revenue has been earned, which of the following journal entries should be recorded? A) Debit Cash, Credit Unearned Revenue. B) Debit Cash, Credit Sales Revenue. C) Debit Unearned Revenue, Credit Cash. D) Debit Cash, Credit Accounts Receivable.
The accountant for Tom's Tax Preparation, Inc. recorded a transaction by debiting Accounts Payable and crediting Cash. Which of the following transactions did the account record? Group of answer choices A. The purchase of supplies on account. B. Payment to suppliers for goods originally purchased on account. C. Receiving cash from suppliers. D. Receipt of payment for services originally provided to customers on account.
Which of the following would indicate a cash payment? a. An increase in prepaid expenses b. Selling equipment at a loss c. A decrease in inventory d. A decrease in accounts receivable
Which one of the following statements about revenue is not correct?A. Revenue can result in increases in accounts receivableB. Revenue can result in increases in liabilitiesC. Revenue is earned whenever cash is received from a customerD. Revenue is earned when a service is provided to a customer
For each of the following transactions, indicate whether operating (O), investing (I), or financingactivities (F) are affected and whether the effect is a cash inflow ( + ) or outflow ( - ), or (NE) if thetransaction has no effect on cash.1. Received deposits from customers for products to be delivered the following period.2. Principal repayments on loan.3. Paid cash to purchase new equipment.4. Received proceeds from loan.5. Collected payments on account from customers.6. Recorded and paid salaries and wages to employees.7. Paid cash for building construction.8. Recorded and paid interest to debt holders.
For each independent situation below, indicate whether the transactions would be included in the statement of cash flows or not. No = Not included Yes= Included Transaction Included Sold items on account Wrote check to pay utilities Received cash investment by owner Recorded wages owed to employees Received bill for advertising
The two independent cases are listed below: Sales Revenue Cost of Goods Sold Gross Profit Depreciation Expense Salaries and Wages Expense Net Income Accounts Receivable Inventory Accounts Payable Salaries and Wages Payable Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities Changes in Assets and Liabilities $ Case Year 2 $ 10,100 5,190 4,910 1,100 1,600 $ 2,210 Case A $ 255 705 710 955 A 0 $ Year 1 $ 4,500 1,900 2,600 1,100 1,100 $ 400 $ 310 410 655 1,110 Required: Show the operating activities section of the statement of cash flows for year 2 using the indirect method. (Amounts to be d should be indicated with a minus sign.) Case B Case Year 2 $ 20,100 11,190 8,910 1,050 4,100 $ 3,760 0 $ 660 685 890 385 B Year 1 $ 13,500 7,720 5,780 1,050 4,100 $ 630 $ 555 710 945 440
E2-30. Apply Financial Statement Linkages to Understand Transactions Consider the effects of the independent transactions, a through g, on a company's balance sheet, income statement, and statement of cash flow. Complete the table below to explain the effects and financial statement linkages. Use "+" to indicate the account increases and "-" to indicate the account decreases. Refer to Exhibit 2-10 as a guide for the linkages. Balance Sheet Cash... Noncash assets Total liabilities... Contributed capital. Retained earnings Other equity. Statement of Cash Flows Operating cash flow Investing cash flow. Financing cash flow Income Statement Revenues Expenses Net income. Statement of Stockholders' Equity Contributed capital. Retained earnings b. ||| C. d. |||| |||| e. ||| f. 9. ||| ||| ||| a. Owners invested cash in the company in exchange for shares of common stock. b. The company received cash from the bank for a loan. c. The company purchased equipment to manufacture goods for sale and…
Harrigan Service Company, Inc., was incorporated by lan Harrigan and five other managers. The following activities occurred during the year: 1. Received $71,400 cash from the managers; each was issued 1,190 shares. 2. Purchased equipment for use in the business at a cost of $50,000; one-fourth was paid in cash and the company signed a note for the balance (due in six months). 3. Signed an agreement with a cleaning service to pay it $690 per week for cleaning the corporate offices, beginning next week. 4. Ian Harrigan borrowed $19,500 for personal use from a local bank, signing a one-year note.

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