Year 31. Pald $2,700 to upgrade the computer system, which extended the total life of the system to six years. The salvage value did notchange.2. Pald $980 In fees to service the computers.3. Collected $34,790 In fees from clients.4. Recorded double-declining-balance depreciation for Year 3.Requireda. Use a horizontal financial statements model to show how each event affects the balance sheet, Income statement, and statement ofcash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column,classify the cash flows as operating activities (OA), Investing activities (IA), or financing activities (FA).b-1. Prepare Income statements for Year 1, Year 2, and Year 3.b-2. Prepare statements of changes in stockholders' equity for Year 1, Year 2, and Year 3.b-3. Prepare balance sheets for Year 1, Year 2, and Year 3.b-4. Prepare statements of cash flows for Year 1, Year 2, and Year 3.Req A Year 1 Req A Year 2 Req A Year 3EventYear 3Balance1.2.3.4.BalanceCashUse a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Moramounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing aactivities (FA).Note: Enter any decreases to account balances or cash outflows with a minus sign. Leave cells blank if no input is needed.Assets108,470 +(2,700) +(980) +34,790++137,580 +NC Net change in cashReg B1IncomeStatementBook Value ofEquipmentBalance Sheet9,360=2,700 =0 =0 =0 =12,060 =ACCOUNTING SOLUTIONS INCORPORATEDHorizontal Statements Model - Year 3Stockholders' EquityRetainedEarningsCommonStock+Req B2Statement ofChanges55,000 +0 +0 +0 ++55,000 +Req B3Balance Sheet60,8300(980)34,79094,640Revenue34,790Req B4Statement ofCash Flows01-101-101-134,790Income StatementExpenses = Net Income0 =0 =(980)=0 =|=(980)=00(980)34,790Statement ofCash Flows0(2,700) IA(980) OA34,790 OA33,810 31,110 NC*

It has been given that a double declining balance method is used and it is in the year 3 that by…

Req A Year 1 Req A Year 2 Req A Year 3 Event Year 3 Balance 1. 2. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Mo amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing a activities (FA). Note: Enter any decreases to account balances or cash outflows with a minus sign. Leave cells blank if no input is needed. Assets Cashi + 106,470 + (2,700) + (980)+ 34,790 3. 4. Balance 137,580 + NC Net change in cash + Req B1 Income Statement Book Value of Equipment Balance Sheet 9,360= 2,700 = 0 = 0 = 0 = 12,060 = ACCOUNTING SOLUTIONS INCORPORATED Horizontal Statements Model - Year 3 Stockholders' Equity Common Stock 55,000+ 0+ 0 + Req B2 Statement of Changes 0+ + 55,000+ Req 83 Balance Sheet Retained Revenue Earnings 60,830 0 (980) 34,790 94,640 0 0 0 34,790 34,790 Req B4 Statement of Cash Flows Income Statement I Expenses 0= 0= (980) 0= (980)= Net Income 0 0 (980) 34,790 Statement of Cash Flows (2,700) IA (980) OA OA 34,790 33,810 31,110 NC

Req A Year 1 Req A Year 2 Req A Year 3 Event Year 3 Balance 1. 2. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Mo amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing a activities (FA). Note: Enter any decreases to account balances or cash outflows with a minus sign. Leave cells blank if no input is needed. Assets Cashi + 106,470 + (2,700) + (980)+ 34,790 3. 4. Balance 137,580 + NC Net change in cash + Req B1 Income Statement Book Value of Equipment Balance Sheet 9,360= 2,700 = 0 = 0 = 0 = 12,060 = ACCOUNTING SOLUTIONS INCORPORATED Horizontal Statements Model - Year 3 Stockholders' Equity Common Stock 55,000+ 0+ 0 + Req B2 Statement of Changes 0+ + 55,000+ Req 83 Balance Sheet Retained Revenue Earnings 60,830 0 (980) 34,790 94,640 0 0 0 34,790 34,790 Req B4 Statement of Cash Flows Income Statement I Expenses 0= 0= (980) 0= (980)= Net Income 0 0 (980) 34,790 Statement of Cash Flows (2,700) IA (980) OA OA 34,790 33,810 31,110 NC

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 5PA: Jada Company had the following transactions during the year: Purchased a machine for $500,000 using...

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