Problem 7-2 10 points The following events apply to Morris Co. for fiscal 2018 and 2019 1 Borrowed $54,000 from the local bank on April 1, 2018, when the company was started. The note had an 8 percent annual interest rate and a one-year term to maturity. 2 Recognized $141,000 of revenue on account in 2018. 3 Recognized $189,000 of revenue on account in 2019. 4 Collected $123,000 cash from accounts receivable in 2018. 5 Paid $87,000 of salaries expense in 2018. 6 Collected $184,500 cash from accounts receivable in 2019. 7 Paid $103,500 of operating expenses in 2019. 8 Accrue interest payable in 2018 9 Accrue interest payable in 2019. 10 Paid the loan and interest at the maturity date, 3/31/19 REQUIRED a. Record the above transactions in a horizontal statements model. Organize into two separate years and separate events accordingly. b. What amount of net cash flow from operating activities would be reported on the 2018 cash flow statement? c. What amount of interest expense would be reported on the 2018 income statement? d. What amount of total liabilities would be reported on the December 31,2018 , balance sheet? e. What amount of retained earnings would be reported on the December 31,2018 , balance sheet? f. What amount of cash flow from financing activities would be reported on the 2018 statement of cash flows? g. What amount of interest expense would be reported on the 2019 income statement? h. What amount of cash flows from operating activities would be reported on the 2019 cash flow statement? i. What amount of assets would be reported on the December 31, 2019, balance sheet? Problem 7-2 10 points The following events apply to Morris Co. for fiscal 2018 and 2019 1 Borrowed $54,000 from the local bank on April 1, 2018, when the company was started. The note had an 8 percent annual interest rate and a one-year term to maturity. 2 Recognized $141,000 of revenue on account in 2018. 3 Recognized $189,000 of revenue on account in 2019. 4 Collected $123,000 cash from accounts receivable in 2018. 5 Paid $87,000 of salaries expense in 2018. 6 Collected $184,500 cash from accounts receivable in 2019. 7 Paid $103,500 of operating expenses in 2019. 8 Accrue interest payable in 2018 9 Accrue interest payable in 2019. 10 Paid the loan and interest at the maturity date, 3/31/19 REQUIRED a. Record the above transactions in a horizontal statements model. Organize into two separate years and separate events accordingly. b. What amount of net cash flow from operating activities would be reported on the 2018 cash flow statement? c. What amount of interest expense would be reported on the 2018 income statement? d. What amount of total liabilities would be reported on the December 31,2018 , balance sheet? e. What amount of retained earnings would be reported on the December 31,2018 , balance sheet? f. What amount of cash flow from financing activities would be reported on the 2018 statement of cash flows? g. What amount of interest expense would be reported on the 2019 income statement? h. What amount of cash flows from operating activities would be reported on the 2019 cash flow statement? i. What amount of assets would be reported on the December 31, 2019, balance sheet
