Rainey Enterprises loaned $40,000 to Small Company on June 1, Year 1, for one year at 6 percent interest.Required:Show the effects of the following transactions in a horizontal statements model.Note: Enter any decreases to account balances and cash outflows with a minus sign. For changes on the Statement of CashFlows, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Not all cells requireinput. Do not round intermediate calculations. Round your final answers to the nearest whole dollar.(1) The loan to Small Company(2) The adjustment at December 31, Year 1.(3) The adjustment and collection of the note on June 1, Year 2.RAINEY ENTERPRISESHorizontal Statements ModelBalance SheetDateAssetsCash+NotesReceivable+InterestReceivable++1. 6/1/Year 12. 12/31/Year 13. 6/1/Year 2 Adjustment3. 6/1/Year 2 Note Collection++++++Liabilities+Stockholders'EquityRetainedEarningsIncome StatementStatement of CashFlowsRevenueExpenseNet Income++=++

Effect of Transactions in the Horizontal Statement Model: The effect of transactions in horizontal…

Answered: Rainey Enterprises loaned $40,000 to…

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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Jones Industries received $800,000 from issuing shares of its common stock and $650,000 from issuing bonds. During the year, Jones Industries also paid dividends of $110,000. How are the effects of these transactions reported on the statement of cash flows? Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required. If a transaction has no effect on the statement of cash flows, select "No effect" from the drop down menu and leave the amount box blank.
Usher Sports Shop had cash flows from investing activities of -$4,464,000 and cash flows from financing activities of -$5,930,000. The balance in the firm's cash account was $1,625,000 at the beginning of the year and $1,762,000 at year-end. Calculate Usher Sports Shop's cash flow from operations. Note: Amounts to be deducted should be indicated by a minus sign. Cash flow from operations
Below is a list of independent transactions. For each transaction, identify which section of the statement of cash flows it is to be reported and indicate if it is a cash in-flow (a positive number) or cash out-flow (negative number). (Hint: recall the use of the accounting equation A=L+E to help determine if an amount is a positive or negative number.) Description Section Amount Issue of bonds payable of $500 cash Sale of land and building of $60,000 cash Retirement of bonds payable of $20,000 cash Current portion of long-term debt changed from $56,000 to $50,000 Repurchase of company's own shares of $120,000 cash Issuance of common shares of $80,000 cash Payment of cash dividend of $25,000 recorded to retained earnings Purchase of land of $60,000 cash and a $100,000 note Cash dividends received from a trading investment of $5,000 Interest income received in cash from an investment of…
Using the Exhibit below, assume that the balance of Accounts Payable was $60,000 at the beginning of the current year. Furthermore, assume that the balance of Accounts Payable is $65,000 at the end of the current year. When preparing the Statement of Cash Flow using the indirect method for the current year, which of the following statements would describe the proper presentation of accounts payable on the Cash flow from operating activities section? EXHIBIT Increase (Decrease) Net Income (loss) $XXX Adjustments to reconcile net income to net cash flow from operating activities: Depreciation of fixed assets XXX Losses on disposal of assets XXX Gains on disposal of…
At the beginning of the current year, a company issued stock for $150,000 and borrowed $80,000 from the bank. By the end of the year, the company had provided services of $83,000 for cash, paid employee salaries of $39,000, and paid utilities of $13,000. Determine the amount of financing cash flows the company will report in the current year. (Cash outflows should be indicated with a minus sign.) Financing cash flows
Concord Corporation had the following transactions that took place during the year: I. Recorded credit sales of $3050 I. Collected $1830 from customers III. Recorded sales returns of $610 and credited the customer's account. What is the total effect of these transactions on free cash flow? Cannot be determined O Increase Decrease O No Effect
On May 1, Year 3, Love Corporation declared a $59,700 cash dividend to be paid on May 31 to shareholders of record on May 15. Required Record the events occurring on May 1 and May 31 in the following horizontal statements model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), Investing activities (IA), or financing activities (FA). Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Date May 01 May 31 Assets Balance Sheet Liabilities + • Common Stock LOVE CORPORATION Horizontal Statements Model Retained Revenus Earnings Income Statement Expenses Net Income Flows
A company borrows $10,000 and signs a 2-year nontrade note payable. In preparing a statement of cash flows (indirect method), this event would be reflected as a(n) addition adjustment to net income in the cash flows from operating activities section. cash outflow from investing activities. cash inflow from financing activities. cash inflow from investing activities.
On May 1, Year 3, Love Corporation declared a $74,100 cash dividend to be paid on May 31 to shareholders of record on May 15. Required Record the events occurring on May 1 and May 31 in the following horizontal statements model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. Date May 01 May 31 Assets Balance Sheet Liabilities Common Stock LOVE CORPORATION Horizontal Statements Model Retained Earnings Revenue Income Statement Expenses Net Income Statement of Cash Flows
During the year, Next Tec Corp. had the following cash flows: receipt from customers, $16,000; receipt from the bank for long-term borrowing, $6,500; payment to suppliers, $6,000; payment of dividends; $1,600, payment to workers, $2,600; and payment for machinery, $10,500. What amount would be reported for net financing cash flows in the statement of cash flows? Multiple Choice $4,900 ($10,500) $6,500 $5,400
During Year 1, Chung Corporation earned $4,800 of cash revenue and accrued $2,500 of salaries expense. Required Based on this information alone: a. Prepare the December 31, Year 1, balance sheet. b. Determine the amount of net income that Chung would report on the Year 1 income statement. c. Determine the amount of net cash flow from operating activities that Chung would report on the Year 1 statement of cash flows. Complete this question by entering your answers in the tabs below. Accounting Equation Based on this information alone: (Not all cells require input. Enter any decreases to account balances with a minus sign.) CHUNG CORPORATION Accounting Equation - Year 1 Assets = Liabilities + Salaries Payable Cash Event Earned revenue Accrued salaries Ending balance Req A Req B and C = = 0 = 0 + + + Stockholders' Equity Retained Earnings Common Stock + + + 0 + 0

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