During the first quarter of the Year 4 (January, February, March), the following events occurred:

A. $500 cash was paid for a new trademark for the company. It was determined that this amount should be capitalized rather than expensed. Since the trademark has an indefinite useful life, no amortization will be recorded.

DOES THIS MEAN THAT ON THE FINANCIAL STATEMENT EFFECTS MODEL THIS WILL NOT APPEAR AS AN EXPENSE OR A REVENUE?

D. Companys advertising agency billed the firm $1,000 for a campaign that ran during the first quarter of Year 4. Company had not paid the bill as of March 31, Year 4

DOES THIS MEAN THAT ON THE FINANCIAL STATEMENT EFFECTS MODEL THIS WILL NOT APPEAR AS AN EXPENSE?

E. Sales totaling $18,000 were made to customers during the first quarter of Year 4. Of these sales, 60% were collected during the first quarter and the balance is expected to be collected during the next quarter.

WOULD 18,000 BE REFLECTED AS REVENUE ON THE FINANCIAL STATEMENT EFFECTS MODEL? OR WOULD WE USE INSTEAD 10,800? (60% OF THE 18k)

K. A new 3-year lease agreement was signed and executed on January 1, Year 4 for the first 6 months of Year 4. The lease required that a $900 monthly rental be paid in advance for the first 2 quarters of the year (total paid is $5,400 = $900 x 6 months)

DOES THIS MEAN THAT ON THE FINANCIAL STATEMENT EFFECTS MODEL WE INPUT -5,400 OR SINCE WE ARE ONLY INTERESTED IN 1ST QUARTER, DO WE USE $2,700?

DO WE RECORD 5,400 OR 2,700 ON THE EXPENSE COLUMN?