The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period: 1. Performed $69.500 of services for clients on account. 2. Performed $43,000 of services for cash. 3. Incurred $34,000 of other operating expenses on account. 4. Paid $16,500 cash to an employee for salary. 5. Collected $50,000 cash from accounts receivable. 6. Pald $18,000 cash on accounts payable. 7. Paid an $5,000 cash dividend to the stockholders. 8. Accrued salaries were $2,600 at the end of Year 1. Required a. Show the effects of the events on the financial statements using a horizontal financial statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. The first event is recorded as an example. (Enter any decreases to account balances with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.) Assets Statement of Cash Event LEWIS AND HARPER Horizontal Financial Statement Model For Accounting Year 1 Stockholders Liabilities Income Statement Equity Accounts Salaries Retained Revenue - Expense - Not Income Payable Earnings 69,500 69.500 69.500 43000 43.0001 - 43000 34,000 (34,000) FIo Cash Accounts Receivable 69.500 43,000| OA 43.000 7- 34,000 - 7 (34,000 Required a. Show the effects of the events on the financial statements using a horizontal financial statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. The first event is recorded as an example. (Enter any decreases to account balances with a minus sign. Not all cells In the Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.) Assets Event Statement of Cash Flow Cash Accounts Receivable LEWIS AND HARPER Horizontal Financial Statement Model For Accounting Year 1 Liabilities Stockholders Equity Income Statement Accounts Salaries Retained Payable Payable Varnings Revenue - Expense - Net Income 69,500 69.500 69,500 43.000 43.000 - 43,000| (34,000) oo (34000) (16.500) (16.500) 69.500 43,000 43,000| OA 16.500) 50.000 + (16.500)| OA 50,000| OA (18,000) | OA (5,000)| FA (5,000) (5.000) (2.600) 54 400 (2.600) 59,400 Totals 53.500 19.500 16.000 53,100 53.500 b. What is the amount of total assets at the end of Year 1? Total assets S 73,000 c. What is the balance of accounts receivable at the end of Year 1? Accounts receivable $ 18,600 d. What is the balance of accounts payable at the end of Year 1? Accounts payable $ 16,000 Accounts payable $ 16,000 f. What is net income for Year 1? Net income $ 59,400 g. What is the amount of net cash flow from operating activities for Year 1? Net cash flow from operating activities for Year 1
