Required: Show the effects of the events on the financial statements using a horizontal statements model. The first event has been recorded as an example. Note: In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, a decreases to account balances and cash outflows with a minus sign. Not all cells require input.
Required: Show the effects of the events on the financial statements using a horizontal statements model. The first event has been recorded as an example. Note: In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, a decreases to account balances and cash outflows with a minus sign. Not all cells require input.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

Transcribed Image Text:Hart, Attorney at Law, experienced the following transactions in Year 1, the first year of operations:
1. Accepted $36,000 on April 1, Year 1, as a retainer for services to be performed evenly over the next 12 months.
2. Performed legal services for cash of $54,000.
3. Purchased $2,800 of office supplies on account.
4. Paid $2,400 of the amount due on accounts payable.
5. Paid a cash dividend to the stockholders of $5,000.
6. Paid cash for operating expenses of $31,000.
7. Determined that at the end of the accounting period $200 of office supplies remained on hand.
8. On December 31, Year 1, recognized the revenue that had been earned for services performed in accordance with Transaction 1.
Required:
Show the effects of the events on the financial statements using a horizontal statements model. The first event has been recorded as an example.
Note: In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. Enter any
decreases to account balances and cash outflows with a minus sign. Not all cells require input.
Transaction
1.
2.
3.
4.
5.
6.
7.
8.
Totals
Cash
Assets
+
36,000 +
+
+
+
+
+
+
+
+
Supplies
=
=
=
Balance Sheet
Accounts
Payable
Effect of Transactions on the Financial Statements for Year 1
Liabilities
+
+
+
+
+
+
+
+
HART, ATTORNEY AT LAW
+
Unearned
Revenue
+
+
36,000 +
+
+
+
+
+
+
+
+
Stockholders'
Equity
Retained
Earnings
Revenue
Income Statement
Expense
=
=
Net Income
Statement of Cash Flows
36,000
OA
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON

Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education