Exercise 13-15A (Algo) Recording prepaid items and identifying their effect on financial statements LO

13-2

Cherokee Company began operations when it issued common stock for $96,500 cash. It paid $86,850 cash in advance for a one-yea

contract to lease delivery equipment for the business. It signed the lease agreement on March 1, Year 1, which was effective

immediately. Cherokee received $110,975 of cash revenue in Year 1.

Required

a. & b. Record the March 1 cash payment and adjustment required as of December 31, Year 1 in general journal format.

c. Show all events in a horizontal statements model.

d. & e. What amount of net income will Cherokee Company report on the Year 1 income statement? What is the amount of net cash

flow from operating activities for Year 1? Determine the amount of prepaid rent Cherokee Company would report on the December 31,

Exercise 13-15A (Algo) Recording prepaid items and identifying their effect on flnancial statements LO 132 Cherokee Company began operations when it issued common stock for $96,500 cash. It paid $86,850 cash in advance for a one-yea contract to lease dellvery equipment for the business. It signed the lease agreement on March 1, Year 1 , which was effective immediately. Cherokee recelved $110,975 of cash revenue in Year 1 . Required a. \& b. Record the March 1 cash payment and adjustment required as of December 31 , Year 1 in general journal format c. Show all events in a horizontal statements model. d. \& e. What amount of net income will Cherokee Company report on the Year 1 income statement? What is the amount of net cash flow from operating activities for Year 1 ? Determine the amount of prepaid rent Cherokee Company would report on the December 31 , Year 1 , balance sheet: Complete this question by entering your answers in the tabs below. Journal entry worksheet Note: Enter deblts before credits. Journal entry worksheet Record the adjusting entry for prepaid rent. Note: Enter debits before credits. the Statement of Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for ne not round intermediate calculations.) Complete this question by entering your answers in the tabs below. What amount of net income will Cherokee Company report on the Year 1 income statement? What is the amount of net cash flow from operating activities for Year 1? Determine the amount of prepaid rent Cherokee Company would report on the December 31, Year 1 , balance sheet. (Do not round intermediate calculations.)