The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting

Question:

The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period:
1. Performed $70,000 of services for clients on account.
2. Performed $40,000 of services for cash.

3. Incurred $36,000 of other operating expenses on account.
4. Paid $10,000 cash to an employee for salary.
5. Collected $47,000 cash from accounts receivable.
6. Paid $16,000 cash on accounts payable.
7. Paid an $8,000 cash dividend to the stockholders.
8. Accrued salaries were $2,000 at the end of Year 1.

Required
a. Show the effects of the events on the horizontal financial statements model like the following one. In the Statement of Cash Flows column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. Use NA to indicate the element is not affected by the event. The first event is shown as an example.

Balance Sheet Income Statement Liabilities Statement of Cash Flows Assets Equity Event No. Accts. Sal. Pay. Accts. Rec.

b. What is the amount of total assets at the end of Year 1?
c. What is the balance of accounts receivable at the end of Year 1?
d. What is the balance of accounts payable at the end of Year 1?
e. What is the difference between accounts receivable and accounts payable?
f. What is net income for Year 1?
g. What is the amount of net cash flow from operating activities for Year 1?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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