Describe all of the effects for the current fiscal year

The firm paid $100 to its suppliers for purchases made in the previous fiscal year.

Balance sheet: AP current liabilities down

Income statement: COGS

Retained earnings portion of the statement of shareholders' equity: NI down

Cash flow Statement: cash from operating activities down

During the year, the firm delivered merchandise costing $200 to a customer, for a total

selling price of $300. The customer had paid $100 as a deposit for the merchandise in the

previous fiscal year, and the balance (i.e., $200) was paid upon delivery this year.

balance sheet: unearned revenue down 100

income statement: revenue up 300 cogs 200

retained earnings portion of the statement of shareholders' equity: NI 100

CF statement: CF from operating activities up 200

Three months after the beginning of the year, the firm purchased a building for $600 in

cash. The building is going to be the new corporate headquarters. The building has an

estimated useful life of 10 years, and a salvage value of zero. The firm uses the straight-line

method for depreciation.

balance sheet: PP&E 555 depreciation expense 45 accumulated depreciation 45

income statement:

retained earnings portion of the statement of shareholders' equity: NI down 555

CF statement: CF investing activities down 600 CF operating activities depreciation up 45

Five months after the beginning of the year, the firm, which is an insurance company,

collected $120 from its customers for one year worth of insurance premiums. Coverage is

effective immediately.

balance sheet: cash up 120

income statement: revenue up 120

retained earnings portion of the statement of shareholders' equity: NI up 120

CF statement: operating CF up 120

The firm declared dividends of $100, one month before the end of the year. The dividends

will be paid in cash early next year.

balance sheet: dividend payable up 100

income statement

retained earnings portion of the statement of shareholders' equity: dined expense up 100

CF statement:

Three months after the beginning of the year, the firm borrowed $2,000 at an annual

interest rate of 5%. The loan is for one year and is classified as a note payable. The note

payable, and all the related interest, will be paid off at the maturity date.

balance sheet: note payable 2000 interest payable 75

income statement:

retained earnings portion of the statement of shareholders' equity: NI up 2000

CF statement: cf operating activities up 2000

The firm wrote-off $150 of accounts receivable because the manager received notice that

the customer went bankrupt, and would not pay the amount.

balance sheet: AR down 150

income statement:

retained earnings of the statement of shareholders equity: ni down 150

CF:

During the year, the firm made progress on a construction project. The project was 30%

completed at the beginning of year and 80% completed at the end of the year. The contract

price is $1,000. Due to unexpected deflation in construction costs during the year,

management revised its estimate of total income from the project from $300 (at the end of

the prior year) to $400 (at the end of the current year). During the year, the firm incurred

$270 of construction costs, which were paid in cash. No invoices were issued and no cash

was collected. The firm uses the percentage-of-completion method to account for the

project.

balance sheet: AR 500 AP 270

income statement: cogs 270 revenue 500

retained earnings of the statement of shareholders equity: NI 320

CF: operating CF AR up 500 AP 270

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