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Exercise 2-31A Identifying transaction type and effect on the financial statements LO 2-8, 2-9 Required Identify whether each of the following transactions is an asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also show the effects of the events on the financial statements using the horizontal statements model. Indicate whether the event increases (I), decreases (D), or does not affect (NA) each element of the financial statements. In the Cash Flows column, designate the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA) or does not affect (NA). The first two transactions have been recorded as examples. a. Provided services and collected cash. b. Purchased supplies on account to be used in the future. c. Paid cash in advance for one year's rent. d. Paid cash to purchase land. e. Paid a cash dividend to the stockholders. f. Received cash from the issue of common stock. g. Paid cash on accounts payable. h. Collected cash from accounts receivable. i. Received cash advance for services to be provided in the future. j. Incurred other operating expenses on account. k. Performed services on account. 1. Adjusted books to reflect the amount of prepaid rent expired during the period. m. Paid cash for operating expenses. n. Adjusted the to record the supplies used during period. o. Recorded accrued salaries. p. Paid cash for salaries accrued at the end of a prior period. q. Recognized revenue on account earned at the end of the accounting period. Horizontal Statements Model Income Statement Transaction Type Assets Stockholders' Equity = Liabilities + Common Retained + Stock Earnings = NA + NA + | Statement of Cash Flows Revenue Net Income Expense a. AS 1 1 NA = 1 1 b. AS = || + NA + NA NA NA = NA NA NA C. + + d. + = e. + f. g. + h. i. + j. + + + + + + + + + + + + + + + + + + + + + + + + + + + + + TIIIIIIIIIIIIII k. + 1. m. + n. + 0. + p. + 9. +