Q2 Q3 ACTIVITY 96 Purpose: Q1 a del was ready to start business on September 1 after issuing common stock for $30,000 and purchasing delivery van for $24,000. 100 Cash Beg. 6,000 (#2) 550 1900 #4 Bal. 7,350 110 Accounts Receivable Beg. -0- 1900 (#1) 2,000 (#2) Bal. 100 130 Delivery Van Beg. 24,000 TEST YOUR UNDERSTANDING Post journal entries directly into T-accounts. Prepare financial statements. TJE #3 TJE #4 Prepare the Statement of Cash Flows using the direct method. Prepare the Statement of Cash Flows using the indirect method. Brian Nelson's Delivery Service Corporation GENERAL LEDGER-September The Accounting Cycle 200 Salaries Payable Beg. -0- 550 700 (#3) 150 Bal 140 Accumulated Depreciation Beg. -0- 500(AJE 1) 300 Common Stock Beg. 30,000 350 Retained Earnings -0- Beg. Page 268 400 Revenue -0- Beg. 500 Depreciation Expense Beg.-0- 2,000 (1) Record the following transaction journal entries for September directly into the T-accounts above. Bill customers for deliveries that total $2,000 during September. TJE #1 TJE #2 510 Salary Expense Beg.-0- (#3) 700 Employees earn $700 in salaries during September. Record as Salaries Payable. For Salaries Payable, the ending balance on September 30 is $150. Prepare the TJE for cash paid to employees. Record the adjusting journal entry for September directly into the T-accounts above: AJE #1 Record September depreciation expense for the delivery van, which has a four-year (48- month) life, using straight-line depreciation. For accounts receivable, the ending balance on September 30 is $100. Prepare the TJE for cash received from customers. Compute the ending balance for each account, recording it as a debit or credit balance in the General Ledger above. These ending balances would appear on the (unadjusted / adjusted / post- closing) trial balance and (be not be) reported on the financial statements. What amounts would be recorded on the September balance sheet? REarnings $800 Total Assets $30,950 Total Liabilities $150 SEquity $30,00 Chapter 7

ACTIVITY 96 TEST YOUR UNDERSTANDING Purpose: - Post journal entries directly into T-accounts. - Prepare finandiaisatements. - Prepare the Statement of Caih flows uning the direct method. - Prepare the Statrment of Cauh flows usine the indirect method. Brian was ready to start business on September 1 after issuine common stock for $30,000 and purcharleg a delwerv vaa for 234mm Q1 Record the following transaction joumal entries for 5 eptember directly into the T-accounts above. TJE \#1 Biil customers for deliveries that total $2,000 during September. TJE #2 For accounts recelvable, the ending balance on September 30 is $100. Prepare the TuE for cash received from customers. TJE \#3 Employees earn $700 in salaries during September. Record as Salaries Payable. TJE 144 For Salaries Payable, the ending balance on September 30 is $150. Prepare the TJE for cash paid to employees. Q2 Record the adjusting journal entry for September directly into the T-accounts above: AUE \#1 Record September depreciation expense for the delivery van, which has a four-year (48. month) life, using straight-line depreciation. Q3 Compute the ending balance for each account, recording it as a debit or credit balance in the General Ledger above. These ending balances would appear on the (unadjusted / adjustyd / postclosing) trial balance and (be) not be) reported on the financial statements. What amounts would be recorded on the September balance sheet? REarnings $800 Total Assets $30,950 Total tiabilities $150 sEquity $30, 900 0 Using amounts from the General Ledgar on the pitevious pas and (B) prepare the Operating Activity son the put 05 Operating Activities? 2. The difference between (accrual. / cash-) based "Revesue" reportod on the (Income Statement / Statement of Cash Flows) and (accrual- / cash-) bost "Cash recelved from customers" reported on the (Income Statement / Statement of Cash Flows) is s This adjustment is (added / subtracted), Riecord in the Adjuntments Column. b. During September. Accounts Receivable had a beglining balance of $ and an ending balance of $ a difference of 5 This differente will lalways / sometimes) be the same as the amount in the Adjurtments Column. c. The difference between (accrual- / cash-) based "salary expense" reported on the (Income Statement / Statement of Cash Flows) and (accrual- / cash.) bast "Salaries paid" reported on the (Income Statement/ Statement of Cash Flows) is 5 (added / subtracted). Record in the Adjustments columin above. This adjustment is d. During September, Salaries Payable had a beginning balance of $ and an ending balance of a difference of S This difference will (always / sometimes) be the saste as the amount in the Adjustments Column. e. Complete the Adjustments Column for Depreciation in the chart abovt. O5 The indirect method of preparing the Statemient of Cash Flows reconcles accrual-based Net Income with cash-based Net Cash from Operating Activities (NCOA). Use amounts from the Adjustments Column above to prepare the Operating Activities section of the Statement of Cash Flows below: cash- Q7 Amounts from the Adjustments Column are usea so rewinam of the (direct / indirect) method. based Net Cash from Operating Activities, which is the purpose of we berted using the (direct / indirect / Q8 In the Statement of Cash Flows, operating octivities may be reported using the (direct / indirect / either) method, investing activitles may be reported using the /direct / indirect / either) and financing octivities may be reported using the (direct) indirect/ ACTIVITY 96 TEST YOUR UNDERSTANDING Purpose: - Post journal entries directly into T-accounts. - Prepare finandiaisatements. - Prepare the Statement of Caih flows uning the direct method. - Prepare the Statrment of Cauh flows usine the indirect method. Brian was ready to start business on September 1 after issuine common stock for $30,000 and purcharleg a delwerv vaa for 234mm Q1 Record the following transaction joumal entries for 5 eptember directly into the T-accounts above. TJE \#1 Biil customers for deliveries that total $2,000 during September. TJE #2 For accounts recelvable, the ending balance on September 30 is $100. Prepare the TuE for cash received from customers. TJE \#3 Employees earn $700 in salaries during September. Record as Salaries Payable. TJE 144 For Salaries Payable, the ending balance on September 30 is $150. Prepare the TJE for cash paid to employees. Q2 Record the adjusting journal entry for September directly into the T-accounts above: AUE \#1 Record September depreciation expense for the delivery van, which has a four-year (48. month) life, using straight-line depreciation. Q3 Compute the ending balance for each account, recording it as a debit or credit balance in the General Ledger above. These ending balances would appear on the (unadjusted / adjustyd / postclosing) trial balance and (be) not be) reported on the financial statements. What amounts would be recorded on the September balance sheet? REarnings $800 Total Assets $30,950 Total tiabilities $150 sEquity $30, 900 0 Using amounts from the General Ledgar on the pitevious pas and (B) prepare the Operating Activity son the put 05 Operating Activities? 2. The difference between (accrual. / cash-) based "Revesue" reportod on the (Income Statement / Statement of Cash Flows) and (accrual- / cash-) bost "Cash recelved from customers" reported on the (Income Statement / Statement of Cash Flows) is s This adjustment is (added / subtracted), Riecord in the Adjuntments Column. b. During September. Accounts Receivable had a beglining balance of $ and an ending balance of $ a difference of 5 This differente will lalways / sometimes) be the same as the amount in the Adjurtments Column. c. The difference between (accrual- / cash-) based "salary expense" reported on the (Income Statement / Statement of Cash Flows) and (accrual- / cash.) bast "Salaries paid" reported on the (Income Statement/ Statement of Cash Flows) is 5 (added / subtracted). Record in the Adjustments columin above. This adjustment is d. During September, Salaries Payable had a beginning balance of $ and an ending balance of a difference of S This difference will (always / sometimes) be the saste as the amount in the Adjustments Column. e. Complete the Adjustments Column for Depreciation in the chart abovt. O5 The indirect method of preparing the Statemient of Cash Flows reconcles accrual-based Net Income with cash-based Net Cash from Operating Activities (NCOA). Use amounts from the Adjustments Column above to prepare the Operating Activities section of the Statement of Cash Flows below: cash- Q7 Amounts from the Adjustments Column are usea so rewinam of the (direct / indirect) method. based Net Cash from Operating Activities, which is the purpose of we berted using the (direct / indirect / Q8 In the Statement of Cash Flows, operating octivities may be reported using the (direct / indirect / either) method, investing activitles may be reported using the /direct / indirect / either) and financing octivities may be reported using the (direct) indirect/