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 Cash Flows, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Not all cells require input. 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 ENTERPRISES Horizontal Statements Model Balance Sheet Date Assets Cash + Notes Receivable + Interest Receivable + + 1. 6/1/Year 1 2. 12/31/Year 1 3. 6/1/Year 2 Adjustment 3. 6/1/Year 2 Note Collection + ++ + ++ Liabilities + Stockholders' Equity Retained Earnings Income Statement Statement of Cash Flows Revenue Expense Net Income + + = + +
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 Cash Flows, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Not all cells require input. 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 ENTERPRISES Horizontal Statements Model Balance Sheet Date Assets Cash + Notes Receivable + Interest Receivable + + 1. 6/1/Year 1 2. 12/31/Year 1 3. 6/1/Year 2 Adjustment 3. 6/1/Year 2 Note Collection + ++ + ++ Liabilities + Stockholders' Equity Retained Earnings Income Statement Statement of Cash Flows Revenue Expense Net Income + + = + +
Chapter16: Statement Of Cash Flows
Section: Chapter Questions
Problem 1PA: Provide journal entries to record each of the following transactions. For each, also identify *the...
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