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Hart, Attorney at Law, experienced the following transactions in Year 1, the first year of operations: 1. Accepted $36,000 on April 1, Year 1, as

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Hart, Attorney at Law, experienced the following transactions in Year 1, the first year of operations: 1. Accepted $36,000 on April 1, Year 1, as a retainer for services to be performed evenly over the next 12 months. 2. Performed legal services for cash of $54,000. 3. Purchased $2,800 of office supplies on account 4. Paid $2,400 of the amount due on accounts payable. 5. Paid a cash dividend to the stockholders of $5,000. 6. Paid cash for operating expenses of $31,000. 7. Determined that at the end of the accounting period $200 of office supplies remained on hand. 8. On December 31, Year 1, recognized the revenue that had been earned for services performed in accordance with Transaction 1 Required Show the effects of the events on the financial statements using a horizontal statements model. The first event has been recorded as an example. (In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input.) HART, ATTORNEY AT LAW Effect of Transactions on the Financial Statements for Year 1 Balance Sheet Income Statement Stockholders' Liabilities Revenue - Net Income Expense Equity Accounts Unearned Retained Payable Revenue Earnings 36,000+ Stat Transaction Assets Cash + Supplies + 36,000+ 1. 2. + + + 3. NS with a minus sign. Not all cens require input.) HART, ATTORNEY AT LAW Effect of Transactions on the Financial Statements for Year 1 Balance Sheet Income Statement Liabilities Stockholders' Revenue Expense - Net Income Equity Accounts Unearned Retained Payable Revenue Earnings 36,000+ Assets Statement of Cash Flows Cash Supplies + 36,000 36,000 + + + . + + + +

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