During Year 1, Star Corporation earned $5,000 of cash revenue and accrued $3,000 of salaries expense. Required

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During Year 1, Star Corporation earned $5,000 of cash revenue and accrued $3,000 of salaries expense.


Required
Record the events in accounts under an accounting equation before satisfying the requirements.

Based on this information alone:

a. Prepare the December 31, Year 1, balance sheet.

b. Determine the amount of net income that Star would report on the Year 1 income statement.

c. Determine the amount of net cash flow from operating activities that Star would report on the Year 1 statement of cash flows.

d. Why are the answers to Requirements b and c different?

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Related Book For  book-img-for-question

Introductory Financial Accounting For Business

ISBN: 9781260575309

2nd Edition

Authors: Thomas Edmonds, Christopher Edmonds, Mark Edmonds, Jennifer Edmonds, Philip Olds

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