Brief Exercise $5-5($Algo$)$ Effect of credit card sales on financial statements LO $5-5$

Music Flow is a streaming music service specializing in podcasts. Music Flow generates revenue through subscriptions that requires customers to pay using a credit card. Consider the following events for Music Flow in Year $1$:

$1.$ Music Flow earned $\backslash (\backslash$$ $532,000\backslash )$ of subscription revenue during Year $1.$

$2.$ Music Flow submitted the credit card receipts to the credit card company immediately. The credit card company paid Music Flow cash in the amount of face value less a $1$ percent service charge.

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. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities $($OA$),$ investing activities $($IA$),$ or financing activities $($FA$).$

Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed.