Rebecca Thompson started a small local law firm to provide various consulting services to clients. Her...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Rebecca Thompson started a small local law firm to provide various consulting services to clients. Her law firm experienced the following events in Year 1, its first year of operation: 1. Borrowed $80,000 cash from a local bank to assist in start-up operations. 2. On May 1, Year 1, the firm collected $30,000 cash for consulting services it agreed to provide over the next 12 months. 3. On December 31, Year 1, the firm adjusted the accounts to reflect the amount of consulting service revenue recognized in Year 1. Assume services are provided evenly throughout the 12 months. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. The first transaction is shown as an example. Note: 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. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input- leave cells blank if there is no corresponding input needed. Event Assets = Number Cash 80,000- 1. 2 3. Total HUW Notes Payable Liabilities 80,000 ✦ ♦ Balance Sheet . Unearned Revenue ++ Stockholders' Equity Retained Earnings Common Stock Income Statement Revenue Expenses Net Income Statement of Cash Flows 80,000 FA Rebecca Thompson started a small local law firm to provide various consulting services to clients. Her law firm experienced the following events in Year 1, its first year of operation: 1. Borrowed $80,000 cash from a local bank to assist in start-up operations. 2. On May 1, Year 1, the firm collected $30,000 cash for consulting services it agreed to provide over the next 12 months. 3. On December 31, Year 1, the firm adjusted the accounts to reflect the amount of consulting service revenue recognized in Year 1. Assume services are provided evenly throughout the 12 months. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. The first transaction is shown as an example. Note: 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. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input- leave cells blank if there is no corresponding input needed. Event Assets = Number Cash 80,000- 1. 2 3. Total HUW Notes Payable Liabilities 80,000 ✦ ♦ Balance Sheet . Unearned Revenue ++ Stockholders' Equity Retained Earnings Common Stock Income Statement Revenue Expenses Net Income Statement of Cash Flows 80,000 FA
Expert Answer:
Related Book For
Introductory Financial Accounting for Business
ISBN: 978-1260299441
1st edition
Authors: Thomas Edmonds, Christopher Edmonds
Posted Date:
Students also viewed these accounting questions
-
The following accounting events apply to Barnes Co. for the year 2013: Asset Source Transactions 1. Began operations when the business acquired $40,000 cash from the issue of common stock. 2....
-
The following accounting events apply to Marys Designs for the year 2016: Asset Source Transactions 1. Began operations by acquiring $90,000 of cash from the issue of common stock. 2. Performed...
-
The following accounting events apply to Little Co. for the year 2016: Asset Source Transactions 1. Began operations when the business acquired $40,000 cash from the issue of common stock. 2....
-
Recent trends in recruiting rely on social capital by ______. Multiple choice question. making use of structural holes between groups in a social network where there are few relationships bridging...
-
Repeat Problem 8 for a disk of uniform surface charge density s.
-
Explain the meaning of over trading.
-
People often think that only accountants need to know accounting. Many students may not consider taking accounting because they have no interest in being an accountant. Whether students aspire to be...
-
The controller of Choleva Products Limited has provided you with the following draft income statement as well as some notes that she made during the preparation of this statement. Choleva Products...
-
ii- Suppose that a market research firm is hired to estimate the proportion of teenagers living in a small city who have cell phones. He surveyed n randomly selected teenagers living in the city and...
-
First Choice Company uses the FIFO cost formula in a perpetual inventory system. Fill in the missing amounts for items (a) through (k) in the following perpetual inventory record: Inventory Balance...
-
The following data (in ohms) are the resistance of resistors made on an automated machine. The mean and range of each sample are given in the right two columns, and the mean of sample means and the...
-
Selection: Commercial Banks Assess Commercial Banks financial situations during the previous five years. Effects of the Federal Reserve's Monetary Policy on the Financial Institutions and Markets...
-
If n(A) 16, n(B) = 16, n (ANB)= 4, find n (AUB) =
-
Identify and describe the various types of performance appraisals. Out of the various appraisals what style do you believe would be the most effective (either based on experience or desire) and...
-
consider how building teams can often be difficult. In many organizations, work groups tend to forget that they are part of a larger organization and become competitive with one another for resources...
-
Estimate the limit 29- lim t-2 -2x-4 x + 2x
-
Hultquist Corporation has two manufacturing departments--Forming and Customizing. The company used the following data at the beginning of the period to calculate predetermined overhead rates:...
-
Solve for the equilibria of the following discrete-time dynamical systems Pr pt+1 = Pr+2.0(I-Pr)
-
Malco Enterprises issued $10,000 of common stock when the company was started. In addition, Malco borrowed $36,000 from a local bank on July 1, Year 1. The note had a 6 percent annual interest rate...
-
How does the recovery of a previously written-off account affect the income statement when the allowance method is used? How does the recovery of a previously written-off account affect the statement...
-
Chen Company established a $200 petty cash fund on January 1, Year 1. Required a. Is the establishment of the petty cash fund an asset source, use, or exchange transaction? b. Show the establishment...
-
Since opening its doors in Hawaii two years ago, Oriental Trading has enjoyed tremendous success. As a wholesaler, Oriental Trading purchases textiles from Asian markets and resells them to local...
-
Ashton Fleming has worked furiously for the past month trying to document the major business information flows at S&S. Upon completing his personal interviews with cash receipts clerks, Ashton asks...
-
A partially completed flowchart appears in Figure 3-13. The flowchart depicts the credit sales activities of the Bottom Manufacturing Corporation. A customers purchase order is received, and a...
Study smarter with the SolutionInn App