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
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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?
Transcribed Image Text: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?
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