Sye Chase started and operated a small family architectural firm in Year 1. The firm was affected by two events: (1) Chase provided $22,600 of services on account, and (2) he purchased $6,900 of supplies on account. There were $1,000 of supplies on hand as of December 31, Year 1.
Required a. b. & e. Record the two transactions in the accounts. Record the required year-end adjusting entry to reflect the use of supplies and the required closing entries. Post the entries in the T-accounts and prepare a post-closing trial balance. (Select "a1, a2, or b" for the transactions in the order they take place. Select "cl" for closing entries. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
c. Show the above transactions in a horizontal statements model. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity and NC for net change in cash and select "NA" wherever required.)
d. Explain why the amounts of net income and net cash flow from operating activities differ.
Required information [The following information applies to the questions displayed below.] Sye Chase started and operated a small family architectural firm in Year 1. The firm was affected by two events: (1) Chase provided $22,600 of services on account, and (2) he purchased $6,900 of supplies on account. There were $1,000 of supplies on hand as of December 31, Year 1. Required a. b. & e. Record the two transactions in the accounts. Record the required year-end adjusting entry to reflect the use of supplies and the required closing entries. Post the entries in the T-accounts and prepare a post-closing trial balance. (Select "a1, a2, or b" for the transactions in the order they take place. Select "cl" for closing entries. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Accounts Receivable Supplies Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. 0 Accounts Payable Retained Earnings Beg. Bal. Beg. Bal. End. Bal End. Bal. 0 Service Revenue Supplies Expense Beg. Bal. Beg. Bal. End. Bal. 0 End. Bal. View transaction list Journal entry worksheet Record the closure of service revenue. Note: Enter debits before credits. General Journal Debit Credit Date Dec 31 Record entry Clear entry View general journal View transaction list Journal entry worksheet Record the closure of supplies expenses. Note: Enter debits before credits. General Journal Debit Credit Date Dec 31 Record entry Clear entry View general journal CHASE ARCHITECTURAL SERVICES Post-Closing Trial Balance December 31, Year 1 Account Titles Debit Credit Totals $ 0 $ 0 Required information [The following information applies to the questions displayed below.) Sye Chase started and operated a small family architectural firm in Year 1. The firm was affected by two events: (1) Chase provided $22,600 of services on account, and (2) he purchased $6,900 of supplies on account. There were $1,000 of supplies on hand as of December 31, Year 1. c. Show the above transactions in a horizontal statements model. (Enter any decreases to account balances and cash outflows with a minus sign. In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity and NC for net change in cash and select "NA" wherever required.) CHASE ARCHITECTURAL SERVICES Effect of Transactions on the Financial Statements for Year 1 Assets Liabilities Stockholders' Equity Revenue Expense Net Income No. Statement of Cash Flow Accounts Receivable + Supplies Accounts Payable Common Stock + Retained Earnings a 1 + + + a2. + + + b. + + + Bal. 0 + 0 = 0 + 0 + 0 0 0 = 0 ! Required information [The following information applies to the questions displayed below.] Sye Chase started and operated a small family architectural firm in Year 1. The firm was affected by two events: (1) Chase provided $22,600 of services on account, and (2) he purchased $6,900 of supplies on account. There were $1,000 of supplies on hand as of December 31, Year 1. d. Explain why the amounts of net income and net cash flow from operating activities differ. Net income is : Net Cash Flow from Operating Activities is of revenue was earned on account, but none was collected; of supplies were used, but none were paid for
