On January 1, Hi-r-Ed Wired Connection opened for business across the street from Northside University. The company charges students a monthly fee of $20 and $1 for each hour they are online. During January, 500 students signed up for the service, and each will have until the fifth of the following month to pay the monthly fee. By the end of January, 200 students had paid the monthly fee. Student usage, payable at the time connected, was 4,500 hours during January. Assume that Hi-r-Ed uses the accrual basis of accounting. Required: 1. Prepare the Revenues section of Hi-r-Ed's income statement for the month of January. Hi-r-Ed Wired Connection Income Statement (partial) For the Month Ended January 31 Revenues: Membership fees Online usage fees Total revenue 2. Prepare the Cash Receipts section of Hi-r-Ed's statement of cash flows for the month of January. Hi-r-Ed Wired Connection Statement of Cash Flows (partial) For the Month Ended January 31 Cash received from: Membership fees Online usage fees 3. In addition to the Cash account, what other account will appear on Hi-r-Ed's balance sheet at the end of January? What amount will be in this account?

On January 1, Hi-r-Ed Wired Connection opened for business across the street from Northside University. The company charges students a monthly fee of $20 and $1 for each hour they are online. During January, 500 students signed up for the service, and each will have until the fifth of the following month to pay the monthly fee. By the end of January, 200 students had paid the monthly fee. Student usage, payable at the time connected, was 4,500 hours during January. Assume that Hi-r-Ed uses the accrual basis of accounting. Required: 1. Prepare the Revenues section of Hi-r-Ed's income statement for the month of January. Hi-r-Ed Wired Connection Income Statement (partial) For the Month Ended January 31 Revenues: Membership fees Online usage fees Total revenue 2. Prepare the Cash Receipts section of Hi-r-Ed's statement of cash flows for the month of January. Hi-r-Ed Wired Connection Statement of Cash Flows (partial) For the Month Ended January 31 Cash received from: Membership fees Online usage fees 3. In addition to the Cash account, what other account will appear on Hi-r-Ed's balance sheet at the end of January? What amount will be in this account?

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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