ok t nces Pizza Express Incorporated began the Year 2 accounting period with $7,500 cash; $5,000...
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ok t nces Pizza Express Incorporated began the Year 2 accounting period with $7,500 cash; $5,000 of common stock; and $2,500 of retained earnings. Pizza Express was affected by the following accounting events during Year 2: 1. Purchased $12,000 of supplies on account. 2. Earned and collected $23,000 of cash revenue. 3. Paid $10,500 cash on accounts payable. 4. Adjusted the records to reflect the use of supplies. A physical count indicated that $2,700 of supplies was still on hand on December 31, Year 2. Required: a. 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. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), Investing activities (IA), or financing activities (FA). The beginning balances are entered in the following example. Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. PIZZA EXPRESS INCORPORATED Effect of Events on Financial Statements for Year 2 Assets Event Number Cash + Supplies = Liabilities Accounts Payable + Stockholders' Equity Income Statement + Common Stock + Retained Earnings Statement of Cash Flows Revenue Expense = Net Income Beginning balance 7,500+ 5,000 + 2,500 1. + 2. + 3. + 4. + Totals 7,500 + 0 = 0+ 5,000 + 2,500 0 0 = 0 0 NC* *Th latton in the Immt time at the L ok t nces Pizza Express Incorporated began the Year 2 accounting period with $7,500 cash; $5,000 of common stock; and $2,500 of retained earnings. Pizza Express was affected by the following accounting events during Year 2: 1. Purchased $12,000 of supplies on account. 2. Earned and collected $23,000 of cash revenue. 3. Paid $10,500 cash on accounts payable. 4. Adjusted the records to reflect the use of supplies. A physical count indicated that $2,700 of supplies was still on hand on December 31, Year 2. Required: a. 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. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), Investing activities (IA), or financing activities (FA). The beginning balances are entered in the following example. Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed. PIZZA EXPRESS INCORPORATED Effect of Events on Financial Statements for Year 2 Assets Event Number Cash + Supplies = Liabilities Accounts Payable + Stockholders' Equity Income Statement + Common Stock + Retained Earnings Statement of Cash Flows Revenue Expense = Net Income Beginning balance 7,500+ 5,000 + 2,500 1. + 2. + 3. + 4. + Totals 7,500 + 0 = 0+ 5,000 + 2,500 0 0 = 0 0 NC* *Th latton in the Immt time at the L
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Related Book For
Introductory Financial Accounting for Business
ISBN: 978-1260299441
1st edition
Authors: Thomas Edmonds, Christopher Edmonds
Posted Date:
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