Stacey's Piano Rebuilding Company has been operating for one year. At the start of the second year, its income statement accounts had zero balances and its balance sheet account balances were as follows: Cash Accounts receivable Supplies Equipment Land Building $6,600 33,000 1,600 9,700 7,600 26,300 Accounts payable Unearned revenue Long-term note payable Common stock Additional paid-in capital Retained earnings $9,800 3,920 49,700 1,700 7,120 12,560 Required: For the transactions below, indicate how the transactions will affect the statement of cash flows. Note: Cash outflows should be indicated with a minus sign. If there is no effect on the statement of cash flows, select "No effect". Transaction a. Rebuilt and delivered five pianos in January to customers who paid $19,400 in cash. b. Received a $640 deposit from a customer who wanted her piano rebuilt. c. Rented a part of the building to a bicycle repair shop; received $890 for rent in January. d. Received $7,400 from customers as payment on their accounts. e. Received an electric and gas utility bill for $420 to be paid in February. f. Ordered $1,000 in supplies. g. Paid $2,360 on account in January. h. Received from the home of Stacey Eddy, the major shareholder, a $960 tool (equipment) to use in the business in exchange for 100 shares of $1 par value stock. Paid $16,900 in wages to employees who worked in January. . Declared and paid a $2,240 dividend (reduce Retained Earnings and Cash). k. Received and paid cash for the supplies in (f). 1. Paid $360 in interest expense on the long-term note payable. Type of Activity Effect on Cash Flows
Stacey's Piano Rebuilding Company has been operating for one year. At the start of the second year, its income statement accounts had zero balances and its balance sheet account balances were as follows: Cash Accounts receivable Supplies Equipment Land Building $6,600 33,000 1,600 9,700 7,600 26,300 Accounts payable Unearned revenue Long-term note payable Common stock Additional paid-in capital Retained earnings $9,800 3,920 49,700 1,700 7,120 12,560 Required: For the transactions below, indicate how the transactions will affect the statement of cash flows. Note: Cash outflows should be indicated with a minus sign. If there is no effect on the statement of cash flows, select "No effect". Transaction a. Rebuilt and delivered five pianos in January to customers who paid $19,400 in cash. b. Received a $640 deposit from a customer who wanted her piano rebuilt. c. Rented a part of the building to a bicycle repair shop; received $890 for rent in January. d. Received $7,400 from customers as payment on their accounts. e. Received an electric and gas utility bill for $420 to be paid in February. f. Ordered $1,000 in supplies. g. Paid $2,360 on account in January. h. Received from the home of Stacey Eddy, the major shareholder, a $960 tool (equipment) to use in the business in exchange for 100 shares of $1 par value stock. Paid $16,900 in wages to employees who worked in January. . Declared and paid a $2,240 dividend (reduce Retained Earnings and Cash). k. Received and paid cash for the supplies in (f). 1. Paid $360 in interest expense on the long-term note payable. Type of Activity Effect on Cash Flows
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Transcribed Image Text:Stacey's Piano Rebuilding Company has been operating for one year. At the start of the second year, its income statement accounts
had zero balances and its balance sheet account balances were as follows:
Cash
Accounts receivable
Supplies
Equipment
Land
Building
$6,600
33,000
1,600
9,700
7,600
26,300
Accounts payable
Unearned revenue
Long-term note payable
Common stock
Additional paid-in capital
Retained earnings
$9,800
3,920
49,700
1,700
7,120
12,560
Required:
For the transactions below, indicate how the transactions will affect the statement of cash flows.
Note: Cash outflows should be indicated with a minus sign. If there is no effect on the statement of cash flows, select "No effect".
i. Paid $16,900 in wages to employees who worked in January.
j. Declared and paid a $2,240 dividend (reduce Retained Earnings and Cash).
k. Received and paid cash for the supplies in (f).
1. Paid $360 in interest expense on the long-term note payable.
Transaction
a. Rebuilt and delivered five pianos in January to customers who paid $19,400 in cash.
b. Received a $640 deposit from a customer who wanted her piano rebuilt.
c. Rented a part of the building to a bicycle repair shop; received $890 for rent in January.
d. Received $7,400 from customers as payment on their accounts.
e. Received an electric and gas utility bill for $420 to be paid in February.
f. Ordered $1,000 in supplies.
g. Paid $2,360 on account in January.
h. Received from the home of Stacey Eddy, the major shareholder, a $960 tool (equipment) to
use in the business in exchange for 100 shares of $1 par value stock.
Type of Activity
Effect on Cash Flows
5
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