Clark Bell started a personal financial planning business when he accepted $69,000 cash as advance payment for managing the financial assets of a large estate. Bell agreed to manage the estate for a one-year period beginning June 1, Year 1. Required Show the effects of the advance payment and revenue recognition on the Year 1 financial statements using the following horizontal statements model. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. If the account is not affected, leave the cell blank. How much revenue would Bell recognize on the Year 2 income statement? What is the amount of cash flow from operating activities in Year 2?
Clark Bell started a personal financial planning business when he accepted $69,000 cash as advance payment for managing the financial assets of a large estate. Bell agreed to manage the estate for a one-year period beginning June 1, Year 1. Required Show the effects of the advance payment and revenue recognition on the Year 1 financial statements using the following horizontal statements model. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. If the account is not affected, leave the cell blank. How much revenue would Bell recognize on the Year 2 income statement? What is the amount of cash flow from operating activities in Year 2?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 52PSA
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![Clark Bell started a personal financial planning business when he accepted
$69,000 cash as advance payment for managing the financial assets of a
large estate. Bell agreed to manage the estate for a one-year period
beginning June 1, Year 1. Required Show the effects of the advance
payment and revenue recognition on the Year 1 financial statements using
the following horizontal statements model. In the Cash Flows column, use
OA to designate operating activity, IA for investing activity, FA for financing
activity, and NC for net change in cash. If the account is not affected, leave
the cell blank. How much revenue would Bell recognize on the Year 2
income statement? What is the amount of cash flow from operating
activities in Year 2?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffeb6c32a-394e-45a9-a6fa-772473288ead%2Fb262b309-170c-4047-bff4-0c5c1a73050c%2Fk69boee_processed.png&w=3840&q=75)
Transcribed Image Text:Clark Bell started a personal financial planning business when he accepted
$69,000 cash as advance payment for managing the financial assets of a
large estate. Bell agreed to manage the estate for a one-year period
beginning June 1, Year 1. Required Show the effects of the advance
payment and revenue recognition on the Year 1 financial statements using
the following horizontal statements model. In the Cash Flows column, use
OA to designate operating activity, IA for investing activity, FA for financing
activity, and NC for net change in cash. If the account is not affected, leave
the cell blank. How much revenue would Bell recognize on the Year 2
income statement? What is the amount of cash flow from operating
activities in Year 2?
![Show the effects of the advance payment and revenue recognition on the Year 1 financial statements using the following horizontal statements model. In the Cash
Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. If the account is not affected,
leave the cell blank. (Do not round intermediate calculations. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells will require
entry.)
Event
1. Advance payment
2. Revenue earned
Totals
Assets =
Cash
=
=
=
BELL PERSONAL FINANCIAL PLANNING
Horizontal Statements Model for Year 1
Stockholders'
Equity
Retained
Earnings
Liabilities +
Unearned
Revenue
+
+
+
+
Revenue
Income Statement
Expense = Net Income
=
=
=
Statement of Cash
Flow
Show less A](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffeb6c32a-394e-45a9-a6fa-772473288ead%2Fb262b309-170c-4047-bff4-0c5c1a73050c%2Fzejebq3_processed.png&w=3840&q=75)
Transcribed Image Text:Show the effects of the advance payment and revenue recognition on the Year 1 financial statements using the following horizontal statements model. In the Cash
Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. If the account is not affected,
leave the cell blank. (Do not round intermediate calculations. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells will require
entry.)
Event
1. Advance payment
2. Revenue earned
Totals
Assets =
Cash
=
=
=
BELL PERSONAL FINANCIAL PLANNING
Horizontal Statements Model for Year 1
Stockholders'
Equity
Retained
Earnings
Liabilities +
Unearned
Revenue
+
+
+
+
Revenue
Income Statement
Expense = Net Income
=
=
=
Statement of Cash
Flow
Show less A
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