ipped Book Hint w Exercise 3-14A (Algo) Effect of accounting events on the income statement and statement of cash flows LO 3-1, 3-2, 3-3 Required: Explain how each of the following events or series of events and the related adjustments will affect the amount of net income and the amount of cash flow from operating activities reported on the year-end financial statements. Identify the direction of change (increase, decrease) and the amount of the change. Organize your answers according to the following table. The first event is recorded as an example. If an event does not have a related adjustment, record only the effects of the event. Note: Not all cells require entry. Do not round intermediate calculations and round your final answers to nearest whole dollar amount. a. Paid $2,900 cash on October 1 to purchase a one-year insurance policy. b. Purchased $1,000 of supplies on account. Paid $750 cash on accounts payable. The ending balance in the Supplies account, after adjustment, was $300. c. Provided services for $7,500 cash. d. Collected $10,500 in advance for services to be performed in the future. The contract called for services to start on May 1 and to continue for one year. e. Accrued salaries amounting to $3,400. f. Sold land that cost $17,200 for $17,200 cash. g. Acquired $45,500 cash from the issue of common stock. h. Earned $13,900 of revenue on account. Collected $12,510 cash from accounts receivable. 1. Paid cash operating expenses of $2,000. Event/ Adjustment Net Income Direction of Change a. Adjustment Decrease b. Adjustment C. Adjustment d. Adjustment Amount of Change $ 725 Cash Flows from Operating Activities Direction of Change Decrease Amount of Change $ 2,900 < Prev 4 of 7 Next >
ipped Book Hint w Exercise 3-14A (Algo) Effect of accounting events on the income statement and statement of cash flows LO 3-1, 3-2, 3-3 Required: Explain how each of the following events or series of events and the related adjustments will affect the amount of net income and the amount of cash flow from operating activities reported on the year-end financial statements. Identify the direction of change (increase, decrease) and the amount of the change. Organize your answers according to the following table. The first event is recorded as an example. If an event does not have a related adjustment, record only the effects of the event. Note: Not all cells require entry. Do not round intermediate calculations and round your final answers to nearest whole dollar amount. a. Paid $2,900 cash on October 1 to purchase a one-year insurance policy. b. Purchased $1,000 of supplies on account. Paid $750 cash on accounts payable. The ending balance in the Supplies account, after adjustment, was $300. c. Provided services for $7,500 cash. d. Collected $10,500 in advance for services to be performed in the future. The contract called for services to start on May 1 and to continue for one year. e. Accrued salaries amounting to $3,400. f. Sold land that cost $17,200 for $17,200 cash. g. Acquired $45,500 cash from the issue of common stock. h. Earned $13,900 of revenue on account. Collected $12,510 cash from accounts receivable. 1. Paid cash operating expenses of $2,000. Event/ Adjustment Net Income Direction of Change a. Adjustment Decrease b. Adjustment C. Adjustment d. Adjustment Amount of Change $ 725 Cash Flows from Operating Activities Direction of Change Decrease Amount of Change $ 2,900 < Prev 4 of 7 Next >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:S
sipped
Book
Hint
aw
11
Exercise 3-14A (Algo) Effect of accounting events on the income statement and statement of cash flows
LO 3-1, 3-2, 3-3
Required:
Explain how each of the following events or series of events and the related adjustments will affect the amount of net income and the
amount of cash flow from operating activities reported on the year-end financial statements. Identify the direction of change (increase,
decrease) and the amount of the change. Organize your answers according to the following table. The first event is recorded as an
example. If an event does not have a related adjustment, record only the effects of the event.
Note: Not all cells require entry. Do not round intermediate calculations and round your final answers to nearest whole dollar
amount.
a. Paid $2,900 cash on October 1 to purchase a one-year insurance policy.
b. Purchased $1,000 of supplies on account. Paid $750 cash on accounts payable. The ending balance in the Supplies account, after
adjustment, was $300.
c. Provided services for $7,500 cash.
d. Collected $10,500 in advance for services to be performed in the future. The contract called for services to start on May 1 and to
continue for one year.
e. Accrued salaries amounting to $3,400.
f. Sold land that cost $17,200 for $17,200 cash.
g. Acquired $45,500 cash from the issue of common stock.
h. Earned $13,900 of revenue on account. Collected $12,510 cash from accounts receivable.
1. Paid cash operating expenses of $2,000.
Event/
Adjustment
Net Income
Direction of
Change
a.
Adjustment Decrease
b.
Adjustment
C.
Adjustment
d.
Adjustment
Amount of
Change
$
725
Cash Flows from
Operating Activities
Direction of Amount of
Change
Change
Decrease
$
2,900
< Prev
4 of 7
Next >
Transcribed Image Text:Continue to one year.
e. Accrued salaries amounting to $3,400.
f. Sold land that cost $17,200 for $17,200 cash.
g. Acquired $45,500 cash from the issue of common stock.
h. Earned $13,900 of revenue on account. Collected $12,510 cash from accounts receivable.
i. Paid cash operating expenses of $2,000.
Event/
Adjustment
a.
Adjustment Decrease
b.
Adjustment
C.
Adjustment
d.
Adjustment
e.
Adjustment
f.
Adjustment
g.
Adjustment
h.
Net Income
Direction of Amount of
Change
Change
Adjustment
i.
Adjustment
41°
$
725
Hi
Cash Flows from
Operating Activities
Amount of
Change
Direction of
Change
Decrease
$
2,900
< Prev
O
4 of 7
‒‒‒
www
Next
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education