Exercise 2-9A (Algo) Effect of accounts receivable and accounts payable transactions on financial statements LO 2-1, 2-2, 2-3, 2-4 The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period: 1. Performed $64,500 of services for clients on account. 2. Performed $41,000 of services for cash. 3. Incurred $30,000 of other operating expenses on account. 4. Paid $15,500 cash to an employee for salary. 5. Collected $50,000 cash from accounts receivable. 6. Paid $16.000 cash on accounts payable. 7. Pald an $5,000 cash dividend to the stockholders. 8. Accrued salaries were $2,200 at the end of Year 1. Required a. Show the effects of the events on the financial statements using the following horizontal statements model. 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. The first event is recorded as an example. 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? f. What is net income for Year 1? g. What is the amount of net cash flow from operating activities for Year 1? Complete this question by entering your answers in the tabs below. Reg A Reg B to G Show the effects of the events on the financial statements dising the following horizontal statemente model in the Cash Flow mlumn HCA A Check my work Complete this question by entering your answers in the tabs below. Req A Req B to G Show the effects of the events on the financial statements using the following horizontal statements model. In the Cash Flow column, use OA to designate op activity, FA for financing activity, and NC for net change in cash. The first event is recorded as an example. (Enter any decreases to account balances with a "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.) Assets LEWIS AND HARPER Horizontal Financial Statement Model For Accounting Year 1 Liabilities tockholders Equity Income Statement Accounts Salaries Retained Revenue Payable Payable Net Income Expense Earning 64,500 64.500 64,500 0+ ol 41,000 41,000 41.000 Event Statement of Cash Flows Cash . Accounts Receivable 64,500 - 0 1 2 3. . 41,000 41,000 OA . . . . 4 5 6 . . + 7. 8 Totals 41,000 64,500 0+ 0+ 105,500 105,500 105,500 41,000 RA Req B to G> Search E d. What is the balance of accounts payable at the end of Year 1? f. What is net income for Year 1? g. What is the amount of net cash flow from operating activities for Year 1? Complete this question by entering your answers in the tabs below. Req A Req B to G b. What is the amount of total assets at the end of Year 1? c. What is the balance of accounts recelvable at the end of Year 1? d. What is the balance of accounts payable at the end of Year 17 f. What is net income for Year 1? 9. What is the amount of net cash flow from operating activities for Year 1? Show less Year 1 b. Total assets c. Accounts receivable d. Accounts payable f. Net income g. Net cash flow from operating activities for Year 1
