Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gifford Company experienced the following accounting events during Year 1: 1. Started operations on January 1 when it acquired $36,000 cash by issuing common

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Gifford Company experienced the following accounting events during Year 1: 1. Started operations on January 1 when it acquired $36,000 cash by issuing common stock. 2. Earned $37,200 of revenue on account. 3. On March 1 collected $55,200 cash as an advance for services to be performed in the future. 4. Paid cash operating expenses of $33,000. 5. Paid a $4,300 cash dividend to stockholders. 6. On December 31, Year 1, adjusted the books to recognize the revenue earned by providing services related to the advance described in Event 3. The contract required Gifford to provide services for a one-year period starting March 1. 7. Collected $31,000 cash from accounts receivable. Gifford Company experienced the following accounting events during Year 2: 1. Recognized $57,200 of cash revenue. 2. On April 1, paid $13,920 cash for an insurance policy that provides coverage for one year beginning immediately. 3. Collected $3,600 cash from accounts receivable. 4. Paid cash operating expenses of $37,000. 5. Paid a $6,600 cash dividedd to stockholders. 6. On December 31, Year 2, adjusted the books to recognize the remaining revenue earned by providing services related to the advance described in Event 3 of Year 1. 7. On December 31, Year 2, Gifford adjusted the books to recognize the amount of the insurance policy used during Year 2. Required a. Record the events in a financial statements model. The first event is recorded as an example. b. What amount of revenue would Gifford report on the Year 1 income statement? c. What amount of cash flow from customers would Gifford report on the Year 1 statement of cash flows? d. What amount of unearned revenue would Gifford report on the Year 1 and Year 2 year-end balance sheets? e. What are the Year 2 opening balances for the revenue and expense accounts? f. What amount of total assets would Gifford report on the December 31, Year 1, balance sheet?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting: A Business Process Approach

Authors: Jane L. Reimers

3rd edition

978-013611539, 136115276, 013611539X, 978-0136115274

More Books

Students also viewed these Accounting questions

Question

How can you estimate a customers LTV?

Answered: 1 week ago