Tim's Auto Service experienced the following events during 2011. 1. Purchased land for cash. 2. Issued common
Question:
Tim's Auto Service experienced the following events during 2011.
1. Purchased land for cash.
2. Issued common stock for cash.
3. Collected cash for providing auto repair services to customers.
4. Paid a cash dividend to the stockholders.
5. Paid cash for operating expenses.
6. Paid cash to reduce the principal balance on a liability.
7. Determined that the market value of the land is higher than its historical cost.
Required
Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Indicate whether the event increases (I), decreases (D), or does not affect (NA) each element of the financial statements. Also, in the Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first transaction is shown as anexample.
.png)
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
Tims Auto Service Horizontal Statements Model for 2011 ...View the full answer
