The following information is drawn from the accounting records of Kristy Company:

Divide the class into groups of four or five students. Organize the groups into four sections. Assign each section of groups the following tasks:

Required

Group Tasks
Section 1 Groups—Prepare a Year 1 income statement and determine the balance in the accounts receivable account as of December 31, Year 1.
Section 2 Groups—Prepare a Year 2 income statement and determine the balance in the accounts receivable account as of December 31, Year 2.
Section 3 Groups—Prepare the Year 1 operating activities section of the statement of cash flows and determine the balance in the accounts payable account as of December 31, Year 1.
Section 4 Groups—Prepare the Year 2 operating activities section of the statement of cash flows and determine the balance in the accounts payable account as of December 31, Year 2.

Transcribed Image Text:

Year 2 Year 1 Revenue recognized on account Cash collections from customers Expenses incurred on account Cash payments to reduce accounts payable $50,000 40,000 30,000 25,000 $40,000 50,000 25,000 30,000