Gifford Company experienced the following accounting events during Year 13 1. Started operations on January 1 when it acquired $24,000 cash by issuing common stock. 2. Earned $22,800 of revenue on account. 3. On March 1 collected $40,800 cash as an advance for services to be performed in the future. 4. Paid cash operating expenses of $21,000, 5. Pald a $3,100 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 $19,000 cash from accounts receivable. Gifford Company experienced the following accounting events during Year 2: 1. Recognized $42,800 of cash revenue. 2. On April 1, pald $12,480 cash for an insurance policy that provides coverage for one year beginning immediately. 3. Collected $2,400 cash from accounts receivable. 4. Paid cash operating expenses of $25,000. 5. Pald a $5,400 cash dividend 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? Req A Year 1 Reg A Year 2 Req B to F Record the events in a financial statements model for Year 1. The first event is recorded as an example. (In the Cash Flow column, use the initials for Net change in cash. Enter any decreases to account balances with a minus sign. Not all cells require input. If there is no effect on the Account GIFFORD COMPANY Horizontal Financial Statements For Year 1 Balance Sheet Event No. Income Statement + Assets Accounts Receivable Cash Prepaid Insurance Liabilities Unearned Revenue Stockholders' Equity Common Retained Stock Earnings Revenue Expense Net Incom Year 1 1. 24,000+ + = 2. 24,000 + + + 22,800 + 22,800 = 22, 40,800+ 40,800 + (21,000) + (3,100) + + NH 21.000] = (21,0 3. 4. 5. 6. 7 Bal (21,000) (3,100) + + 19,000+ 59.700 + (19,000) 3,800 + 0 40,800 24,000 (1.300) 0 21.000 - 1. ( TH 1 HP 1 Reg A Year 2 > or Year 1 Income Statement Statement of Cash Flows Revenue Expense Net Income 11 24,000 FA DO - - - II 22,800 10 21,000 = 0) 0) (21,000) 43,200 OA (21,000) OA (3,100) FA - - 1 = - II D) 19,000 OA 62,100 NC 0 21,000 11 1,800 A Year 1 Req A Year 2 > Reg A Year 1 Reg A Year 2 Req B to F Record the events in a financial statements model for Year 2. (in the Cash Flow column, use the initials OA to designate operating activity, IA for i decreases to account balances with a minus sign. Not all cells require input. If there is no effect on the Account Titles for Statement of Cash Flows GIFFORD COMPANY Horizontal Financial Statements For Year 2 Balance Sheet Income Statement Event No. Assets Liabilities Stockholders' Equity Accounts Cash Prepaid Unearned Common Retained Revenue Receivable Insurance Expense Revenuo Stock Earnings Bal 1. 2 3. + N + + + + + + = III 4. 5 6 ##### 7 Bal 0 0 les for stater or Cash Flows, leave the cell blank.) RD COMPANY al Statements For Year 2 Income Statement Statement of Cash Flows holders' Equity Retained Earnings + Revenue - Expense Net Income + !! Year 1 Req A Year 2 Req B to F hat amount of revenue would Gifford report on the Year 1 income statement? hat amount of cash flow from customers would Gifford report on the Year 1 statement of cash fic "hat amount of unearned revenue would Gifford report on the Year 1 and Year 2 year-end balanc What are the Year 2 opening balances for the revenue and expense accounts? hat amount of total assets would Gifford report on the December 31, Year 1, balance sheet? Revenue Jnearned revenue for Year 1 Unearned revenue for Year 2 Revenue account, opening balance Expense account, opening balance Total assets