The Containers Inc. experienced the following events during its first year of operations, Year 1:

Acquired $42,000 cash by issuing common stock.

Earned $25,000 revenue on account.

Paid $18,000 cash for operating expenses.

Borrowed $10,000 cash from a bank.

Collected $22,000 of the balance in accounts receivable.

Paid a $1,000 cash dividend.

Required

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, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is recorded as an example.

a. Would the accounts receivable account appear in the assets, liabilities, or stockholders' equity section of the December 31, Year 1, balance sheet?

b. Determine the balance of the accounts receivable account that would appear on the December 31, Year 1, balance sheet.

c. Determine the amount of net income that would appear in the Year 1 income statement.

d. Determine the amount of the cash flow from operating activities that would appear in the Year 1 statement of cash flows.

 

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Check my work Accounting Equation Reg A Req B to D Show the effects of the events on the financial statements using e horizontal financial statements model like the following one. In the Cash Flow column, usaC TA for investment activity, FA for financing activity, NC for net change in cesh and NA to indicate the element is not affected by the event. The first event is ret decreases to account balances and cash outflows with a minus sign.) THE CONTAINERS INC. Horizontal Statements Model for Year 1 Balance Sheet Income Statement Statement af Cash Flows Liabilities+ Stockholders Equity Expense -Net Income Revenue Assets Event Retained Comman Stock Accounts Notes Cash Receivable Payable 42.000 FA Eamings 42,000. 42,000+ 1. 2. 3. 4. 6. Totals Req A > < Prev 6 of 12 Next> Check my work Accounting Equation Reg A Req B to D Show the effects of the events on the financial statements using e horizontal financial statements model like the following one. In the Cash Flow column, usaC TA for investment activity, FA for financing activity, NC for net change in cesh and NA to indicate the element is not affected by the event. The first event is ret decreases to account balances and cash outflows with a minus sign.) THE CONTAINERS INC. Horizontal Statements Model for Year 1 Balance Sheet Income Statement Statement af Cash Flows Liabilities+ Stockholders Equity Expense -Net Income Revenue Assets Event Retained Comman Stock Accounts Notes Cash Receivable Payable 42.000 FA Eamings 42,000. 42,000+ 1. 2. 3. 4. 6. Totals Req A > < Prev 6 of 12 Next>

Answer rating: 100% (QA)

Answer a Accounts Receivable will ... View the full answer