Problem 13 28A (Algo) Showing events in a statements model, recording them in T accounts, and preparing a trial balance LO 13 1, 13 3 The following accounting events apply to Marys Designs for Year 1 Asset Source Transactions Began operations by acquiring $25,000 of cash from the issue of common stock Performed services and collected cash of $750 Collected $4,550 of cash in advance for services to be provided over the next 12 months Provided $11,700 of services on account Purchased supplies of $410 on account Asset Exchange Transactions Purchased $4,300 of land for cash Collected $7,400 of cash from accounts receivable Purchased $490 of supplies with cash Paid $4,000 for one years rent in advance Asset Use Transactions Paid $2,600 cash for salaries of employees Paid a cash dividend of $2,100 to the stockholders Paid off $410 of the accounts payable with cash Claims Exchange Transactions Placed an advertisement in the local newspaper for $170 on account Incurred utility expense of $125 on account Adjusting Entries Recognized $3,413 of revenue for performing services The collection of cash for these services occurred in a prior transaction (See Event 3 ) Recorded $1,260 of accrued salary expense at the end of Year 1 Recorded supplies expense Had $140 of supplies on hand at the end of the accounting period Recognized three months of expense for prepaid rent that had been used up during the accounting period Required a Record each of the preceding events in T accounts b Prepare a before closing trial balance c Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows The first event is recorded as an example (Use to indicate an increase, for decrease, or for increase and decrease In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) Not all cells require input )

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Problem 13-28A (Algo) Showing events in a statements model, recording them in T-accounts, and preparing a trial balance LO 13-1, 13-3 The following accounting events

Problem 13-28A (Algo) Showing events in a statements model, recording them in T-accounts, and preparing a trial balance LO 13-1, 13-3

The following accounting events apply to Marys Designs for Year 1: Asset Source Transactions

Began operations by acquiring $25,000 of cash from the issue of common stock.
Performed services and collected cash of $750.
Collected $4,550 of cash in advance for services to be provided over the next 12 months.
Provided $11,700 of services on account.
Purchased supplies of $410 on account.

Asset Exchange Transactions

Purchased $4,300 of land for cash.
Collected $7,400 of cash from accounts receivable.
Purchased $490 of supplies with cash.
Paid $4,000 for one years rent in advance.

Asset Use Transactions

Paid $2,600 cash for salaries of employees.
Paid a cash dividend of $2,100 to the stockholders.
Paid off $410 of the accounts payable with cash.

Claims Exchange Transactions

Placed an advertisement in the local newspaper for $170 on account.
Incurred utility expense of $125 on account.

Adjusting Entries

Recognized $3,413 of revenue for performing services. The collection of cash for these services occurred in a prior transaction. (See Event 3.)
Recorded $1,260 of accrued salary expense at the end of Year 1.
Recorded supplies expense. Had $140 of supplies on hand at the end of the accounting period.
Recognized three months of expense for prepaid rent that had been used up during the accounting period.

Required a. Record each of the preceding events in T-accounts.

b. Prepare a before-closing trial balance.

c. Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. The first event is recorded as an example. (Use + to indicate an increase, for decrease, or +/- for increase and decrease. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Not all cells require input.)