The following is a partial list of transactions FRC Company experienced during its Year 4 accounting period:
1. Collected cash for services to be performed in the future.
2. Paid cash to purchase supplies.
3. Paid cash to purchase a long-term depreciable asset.
4. Paid cash to purchase insurance coverage for the coming year.

Required
Assume that each of the events requires a year-end adjustment. Use a horizontal financial statements model to show how the adjustments affect the financial statements. Use increase (I) and decrease (D) to indicate how the adjustment affects each element of the financial statements. Use the letters NA to indicate that an element is not affected by the adjustment. In the Statement of Cash Flows column, indicate whether cash increase (I) decreases (D), or is not affected (NA). Also, indicate whether the cash flow was caused by an operating activity (OA), an investing activity (IA), or financing activity (FA).

Transcribed Image Text:

Statement of Cash Balance Sheet Income Statement Assets Exp. Net Inc. Flows Llab. Equity Rev. NA NA NA NA NA OA