The following informátion is available for Pacilio Security Services, Inc. for Year 1, its first year of operations. Pacilio provides security services for local sporting events. The following summary transactions occurred during Year 1: 1. Acquired $6,000 from the issue of common stock. 2. Borrowed $5,000 from the Small Business Government Agency. The loan is interest-free. 3. Performed security services at local sporting events during the year for $9,000 cash. 4. Paid salaries expense of $3,000 for the year. 5. Purchased land for $4,000. 6. Paid other operating expenses of $2,000 for the year. 7. Paid a cash dividend to the shareholders of $2.500. 8. The market value of the land was determined to be $4,500 at December 31, Year 1. Required a. Show the effects of the events on the financial statenents using a horizontal statements model given below. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash and NA to indicate accounts not affected by the event. b. Prepare an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1. c. Indicate whether the transaction increases (+), decreases (-), or increases and decreases (+/-) for each element of the financial statements. Also, in the Cash Flow column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity. The first transaction is recorded as an example.
The following informátion is available for Pacilio Security Services, Inc. for Year 1, its first year of operations. Pacilio provides security services for local sporting events. The following summary transactions occurred during Year 1: 1. Acquired $6,000 from the issue of common stock. 2. Borrowed $5,000 from the Small Business Government Agency. The loan is interest-free. 3. Performed security services at local sporting events during the year for $9,000 cash. 4. Paid salaries expense of $3,000 for the year. 5. Purchased land for $4,000. 6. Paid other operating expenses of $2,000 for the year. 7. Paid a cash dividend to the shareholders of $2.500. 8. The market value of the land was determined to be $4,500 at December 31, Year 1. Required a. Show the effects of the events on the financial statenents using a horizontal statements model given below. In the Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash and NA to indicate accounts not affected by the event. b. Prepare an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1. c. Indicate whether the transaction increases (+), decreases (-), or increases and decreases (+/-) for each element of the financial statements. Also, in the Cash Flow column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity. The first transaction is recorded as an example.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Answer only please. Answer all parts of question please.
Transcribed Image Text:The following informátion is available for Pacilio Security Services, Inc. for Year 1, its first year of operations. Pacilio provides security
services for local sporting events.
The following summary transactions occurred during Year 1:
1. Acquired $6,000 from the issue of common stock.
2. Borrowed $5,000 from the Small Business Government Agency. The loan is interest-free.
3. Performed security services at local sporting events during the year for $9,000 cash.
4. Paid salaries expense of $3,000 for the year.
5. Purchased land for $4,000.
6. Paid other operating expenses of $2,000 for the year.
7. Paid a cash dividend to the shareholders of $2.500.
8. The market value of the land was determined to be $4,500 at December 31, Year 1.
Required
a. Show the effects of the events on the financial statenents using a horizontal statements model given below. In the Cash Flows
column, use OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash and NA to
indicate accounts not affected by the event.
b. Prepare an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1.
c. Indicate whether the transaction increases (+), decreases (-), or increases and decreases (+/-) for each element of the financial
statements. Also, in the Cash Flow column, use the letters OA to designate operating activity, IA for investing activity, FA for financing
activity. The first transaction is recorded as an example.
Complete this question by entering your answers in the tabs below.
Required B
Stmt of Cash
ERequired B Inc
Required B
Required B Bal
Required C
Onalysis
Stmt
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required B Inc Required B
Stmt
Required B Bal Required B
Sheet
Required C
Analysis
Required A
Stmt of Cash
Stmt
Stkholders Eq
Flows
Show the effects of the events on the financial statements using a horizontal statements model given below. In the Cash Flows column, use OA to designate operating act
investing activity, FA for financing activity, NC for net change in cash and NA to indicate accounts not affected by the event. (Enter any decreases to account balances and
with a minus sign.)
Pacillio Security Services
Horizontal Statements Model for Year 1
Assets
= Liabilities
Stockholders' Equity
Income Statement
Statement of Cash
Flows
Event
+ Retained
Notes
Common
+.
Earnings
Revenues - Expenses = Net Incomne
Cash
+
Land
%3D
Payable
Stock
Beg.
+
1.
+
+
2.
3.
4.
+
=
+
5.
+
%3D
6.
7.
+
8.
Totals
+1
Required A
Required B Inc Stmt >
Mc
( Prev
21 of 21
Next
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 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