Required Explain how each of the following events or series of events and the related adjusting entry will affect the amount of net income and the amount of cash flow from operating activities reported on the year-end financial statements. Identify the direction of change (increase or decrease) and the amount of the change. If there is no change, leave the cell blank. Organize your answers according to the following table. The first event is recorded as an example. If an event does not have a related adjusting entry, record only the effects of the event. (Not all cells will require entry. Do not round intermediate calculations.) Paid $2,200 cash on October 1 to purchase a one-year insurance policy.Purchased $1,300 of supplies on account. Paid $700 cash on accounts payable. The ending balance in the Supplies account, after adjustment, was $350.Provided services for $7,600 cash.Collected $10,500 in advance for services to be performed in the future. The contract called for services to start on May 1 and to continue for one year.Accrued salaries amounting to $3,900.Sold land that cost $18,100 for $18,100 cash.Acquired $52,500 cash from the issue of common stock.Earned $10,400 of revenue on account. Collected $9,360 cash from accounts receivable.Paid cash for other operating expenses of $1,000. Cash Flows fromNet IncomeEvent/Operating ActivitiesAdjustment Direction of Amount ofChangeDirection of Amount ofChangeChangeChangeа.Decrease$2,200Adj.Decrease550b.Adj.C.Adj.d.Adj.е.Adj.f.Adj.g.Adj.h.Adj.i.Adj.

Adjusting entries Adjusting entries are required in order to accurately record things that were…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Required

Explain how each of the following events or series of events and the related adjusting entry will affect the amount of net income and the amount of cash flow from operating activities reported on the year-end financial statements. Identify the direction of change (increase or decrease) and the amount of the change. If there is no change, leave the cell blank. Organize your answers according to the following table. The first event is recorded as an example. If an event does not have a related adjusting entry, record only the effects of the event. (Not all cells will require entry. Do not round intermediate calculations.)

Paid $2,200 cash on October 1 to purchase a one-year insurance policy.
Purchased $1,300 of supplies on account. Paid $700 cash on accounts payable. The ending balance in the Supplies account, after adjustment, was $350.
Provided services for $7,600 cash.
Collected $10,500 in advance for services to be performed in the future. The contract called for services to start on May 1 and to continue for one year.
Accrued salaries amounting to $3,900.
Sold land that cost $18,100 for $18,100 cash.
Acquired $52,500 cash from the issue of common stock.
Earned $10,400 of revenue on account. Collected $9,360 cash from accounts receivable.
Paid cash for other operating expenses of $1,000.